Black Diamond Group Limited

Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome you to the Black Diamond fourth quarter and year end 2025 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star then the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star one. Thank you. I would now like to turn the conference over to Emma Coveden, Vice President, Investor and Stakeholder Relations. Emma, please go ahead.

Thank you. Good morning and welcome to Black Diamond Group's fourth quarter and full year 2025 results conference call. With me this morning, we have Chief Executive Officer Trevor Haines, Chief Financial Officer Toby Labrie, Chief Operating Officer of Modular Space Solutions, Ted Redman, Chief Operating Officer of Workforce Solutions, Mike Ridley, and President of Royal Camp Services, John Warren. 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 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 the sections of Black Diamond's fourth quarter 2025 management 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 the company's website at www.blackdiamondgroup.com and also on the Cedar Plus website at www.cedarplus.ca. Dollar amounts discussed in today's call are expressed in Canadian dollars unless noted otherwise and may be rounded. The format for today will be similar to prior conference calls. Trevor will start with a high-level overview of the company's performance and highlights from the full year, including our view of the current and forward-looking operating environment. Trevor will then pass the call over to Toby for a more in-depth summary of the financials, including details from the quarter, and then we'll open the line for Q&A. With that, I'll turn the call over to Trevor.

Thank you, Emma. We appreciate everyone joining this morning for our fourth quarter and full year 2025 results conference call. First and foremost, I'd like to thank and recognize the exceptional team here at Black Diamond Group for delivering another highly successful year and continuing an impressive track record of performance. Before turning to the results, I want to acknowledge the team's unwavering commitment and focus to safety across the business, which resulted in year-end trip of 0.47 and zero lost time claims. Safety is a non-negotiable here at Black Diamond, and everything we do comes second to ensuring our employees and all those in our network return home safely at the end of each day. 2025 was another strong year for Black Diamond, marked by the completion of two strategic acquisitions, an oversubscribed equity financing, the expansion and extension of our asset-based credit facility, and disciplined execution resulting in compounding growth across the company. Our annual consolidated revenue of $456.9 million increased by 13%, with consolidated rental revenue reaching $162.2 million, up 10% from the prior year. Full-year adjusted EBITDA of $126.4 million also increased by 12%. This performance has resulted in strong five-year compound annual growth rates of 20% for consolidated revenue, 20% for consolidated rental revenue, and 26% for adjusted EBITDA. Our growth strategies are backed by disciplined capital allocation, and we continue to prudently allocate capital informed by long-term asset return data and customer demand to maximize returns over the life cycle of our fleets. 2025 capital expenditures of $105 million was generally in line with the prior year with the majority of capital going to contract-backed assets and strategic growth initiatives. So far this year, capital commitments are approximately $31 million, further underscoring the depth of opportunities across the business for continued investment and compounding growth. As of December 31st, the company had $149.3 million of future contracted rental revenue, a modest decrease of 6% from the prior year, yet still robust and a leading indicator in forming our stable outlook for the business over the coming quarters. All areas of the business produced strong results in 2025. MSS, again, generated record rental revenue of $107 million, up 14% from the prior year, contributing to adjusted EBITDA of 82.9 million, up 7% from the prior year. and average rental rates increased by 7%. WFS delivered total revenue of $233.1 million, up 30% from the prior year, contributing to adjusted EBITDA of $67.4 million, up 16%, which includes approximately one and a half months of contribution from Royal Camp Services, with that transaction having closed November 12th of 2025. And LodgeLink progressed through its year of transformation and continued to scale as total trade value of $114.9 million increased 21% from the prior year, generating record net revenue of $14.2 million, up 25% from the prior year. Looking back over a longer time frame, the performance from each area of the business is just as impressive, with five-year compound annual growth rates or CAGRs, of 22% for MSS Consolidated Rental Revenue, 22% for WFS Consolidated Revenue, and 45% for LaunchLink Full Trade Value, or TTV. These results highlight the effectiveness of our long-term growth strategy, best-in-class operational excellence practices, and underscores the resilience in our platform, given our distinct business units, comprehensive product and service offerings, diversified end markets, and broad geographic footprint. While these metrics indeed showcase the success from last year, an immense amount of hard work took place across the business to bring these numbers to fruition. And it's this I'd like to spend a bit of time on next. In 2025, there were several big wins that moved the business forward in a meaningful way. For the first time in over eight years, Black Diamond completed an oversubscribed bought deal public offering of shares in late June, issuing approximately 4.7 million common shares at $9.10 for gross proceeds of approximately $42 million. We also completed the extension and expansion of our asset-based credit facilities from $325 million to $425 million. for five years at attractive terms and attractive borrowing costs. Both the BOD deal and ABL expansion enabled us to later acquire Royal Cab Services for $165 million. The acquisition brings additional scale and enhanced service offering with integrated hospitality and catering and many long-term indigenous partnerships that complement our many partnerships across Canada. Since then, we have been working at integrating this high-quality business that's proving to have both values and cultural alignment with Black Diamond, perhaps even more so than initially thought. Our commercial and operations teams are collaborating closely on the breadth of bid opportunities in the pipeline and projects on the horizon. And we've begun the process of replacing third-party catering providers with Royal Camp's quality catering and hospitality services, as it makes sense to do so. which has been well received by our customers so far. And we also complement, we also completed a small tech acquisition with Spencer Corporate Travel in Australia that's positioned us well to serve customers in that region and expand our offering into the greater Asia Pacific. By nearly every measure, Black Diamond had a brilliant year, progressing our growth and operational strategies, serving our customers, collaborating with our partners, making a positive impact in the communities where we live and work, and ultimately delivering significant value to our shareholders. As we look ahead to the first half of 2026, we'll continue to build on this foundation with steady operating conditions and supportive macro tailwinds anticipated in core end markets across North America and Australia. While correlating stable demand is expected across the platform, a degree of near-term variability exists when narrowing in on certain areas of the business. MSS will continue showing rental revenue stability with moderate growth in concert with organic fleet additions and modest average rental rate increases in line with inflation. Fleet utilization remains within our optimal range, underpinned by stable customer activity across our diversified end markets, including strength in construction and major infrastructure verticals. slightly offset by delays in the education pipeline, which we believe is as a result of shifts in public sector funding. Overall, the fundamentals of this area of the business remain healthy, and the current demand we're seeing is conducive to further disciplined capital allocation to expand the fleet and our operations. Turning to WFS, recent strong performance highlights the somewhat episodic nature of this area of the business, given several one-time occurrences within the fourth quarter, including rental revenue from an early contract termination for a U.S. project and high sales revenue. In the near-term, performance of WFS is expected to be steady, although the contract termination will impact rental run rate and utilization in the region as assets are gradually redeployed on new projects. T1 2026 will be the first full quarter of contribution from Royal to the WFS division, which will form the new baseline for the combined entity. Over the next several quarters, we expect results for the base business to remain reasonably consistent, excluding periodic project and sales revenues, which remain hard to predict in terms of timing and opportunities. While elevated bidding activity and customer project planning associated with prospective nation-building projects in Canada continues. This activity won't translate into meaningful growth or step changes that would materially increase utilization until late in 2026 or early 2027, as sales cycles in this area of the business are inherently long. That said, the outlook for WFS is brighter than it has been in several years with significant catalysts on the horizon. which we are very well positioned to respond to. LodgeLink is set for accelerated growth as the completion of a substantial new suite of software tools and services is set to become available to the market later this year, which in turn will help to expand our customer base, increase wallet share among current customers, and drive travel segment volumes, particularly in the U.S. and Australia-Asia-Pacific. We'll continue to advance our software functionality to complement existing capabilities, providing customers with increased efficiencies, further differentiating our offerings to the market. Overall, we are pleased with our performance in 2025 and are confident in the company's stability in the near term. Our core rental platform and the recurring aspects of the WFS business are running well, yet project-oriented or variable revenue streams related to sales is expected to be uneven in the first few quarters. When we look ahead at the full year, we are confident in our growth expectations, strengthen the fundamentals of the business, attracting returns on capital, consistent free cash flow generation, and healthy operating leverage. Black Diamond has all the tools required to continue to compound long-term growth and shareholder value. With that, I'll now turn the call over to Toby.