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Black Diamond Group Limited Reports Results for the Third

Black Diamond Group Limited Reports Results for the Third Quarter
Ended September 30, 2012 
CALGARY, ALBERTA -- (Marketwire) -- 11/05/12 -- (TSX:BDI) Black
Diamond Group Limited ("Black Diamond" or the "Company") is pleased
to announce its financial and operational results for the three and
nine months ended September 30, 2012.  
Third Quarter 2012 Highlights 
Revenue generation in the third quarter of 2012 was $74.9 million
with EBITDA of $31.2 million for the period, compared to revenue of
$63.1 million and EBITDA of $25.2 million for the same period in
2011.  
Rental revenue generated of $29.3 million was 44% higher than the
prior year's comparable period due to the increase in the rental
fleet of the Company as well as utilization and rental rate increases
for many of the asset classes and branch operations of the Company.
Non-rental revenue of $30.5 million represented a slight increase
from the prior year. Lodging revenue was $15.1 million, a slight
increase from the prior year.  
EBITDA margins of 42% for the quarter were up from the 40% generated
in the prior year. This was due to increasing gross margins as a
result of a higher percentage of revenues coming from rental
activity. Highlights from each of the operating divisions for the
quarter are as follows: 
Camps:  
The division ended the quarter with 2,652 units representing
approximately 10,815 accommodation beds in the rental fleet which
averaged 93% utilization for the period. The division generated $25.5
million in revenue compared to $19.3 million in the same quarter of
2011. Rental revenues increased by 59% over the second quarter of
2011 to $17.3 million as a result of the larger fleet of assets and
rental rate increases. Non-rental revenues decreased slightly in the
quarter due to a decline in the volume of sales of newly manufactured
products in the quarter. EBITDA generated in the quarter was $16.2
million or 32% higher than that generated in the same period last
year. 
Logistics: 
The division ended the quarter with 2,641 beds in the operated camps,
which were fully utilized during the period. Lodging revenues from
these operated camps for the period were $15.1 million, an 8%
increase from the third quarter of 2011. Operational revenues saw a
376% increase as compared to the t
hird quarter of 2011 due to the
initial operational activity associated with the deployment of
several substantial projects requiring transportation and
installation. EBITDA generated in the quarter was $7.8 million or 30%
higher than that generated in the same period last year. 
BOXX Modular:  
The division ended the quarter with 3,024 units in the rental fleet
which averaged 75% utilization for the period. The division generated
$13.2 million in revenue compared to $18.1 million in the same
quarter of 2011. The decrease in revenues was due to fewer sales of
custom product. Rental revenue was 36% higher year over year as a
result of an increased rental fleet. The EBITDA for the quarter was
$5.7 million, a small increase from the prior year third quarter
EBITDA of $5.6 million. 
Energy Services:  
The division ended the quarter with 2,328 units in the surface rental
fleet which averaged 46% utilization for the period and 269 pieces of
drilling accommodations fleet representing 954 accommodation beds
which averaged 67% utilization during the quarter. The division
generated $9.2 million in revenue, a minimal change from the same
quarter of 2011. There was a slight increase in rental revenue for
the current quarter as compared with the third quarter of 2011. The
increase in rental revenue was offset by a decrease in non-rental
revenue. Non-rental revenue for the period was $4.1 million compared
with $4.8 million. As such, the EBITDA generated by this division for
the quarter was $3.6 million, an increase from $3.4 million from the
same period of 2011. 
Balance Sheet 
The Company ended the period with net debt of $25.1 million,
comprised of $25 million drawn on its capital facility, senior
secured notes of $61.3 million, net of amortized set up costs, and a
working capital surplus of $61.2 million. 
The current number of common shares outstanding is 41.1 million, with
3.4 million common shares reserved for issuance pursuant to the
exercise of options which have been granted pursuant to the share
option plan. 
Dividends 
The Company paid dividends of $0.06 for July, August, and September
(equivalent to $0.72 per share when annualized) resulting in a payout
ratio for the period of 24%, comparable with the same period in 2011.
The Board of Directors of Black Diamond is confident that the cash
generated from operations will be sufficient to meet the dividend
obligations. 
Outlook 
The third quarter of 2012 has delivered both record revenue and
EBITDA generation. The strong results are related to the Company's
continued capital program coupled with strong utilization. Field
level operations related to the installation of new facilities were
also very strong in the quarter. Management expects similar strength
in Q4 and anticipates results to be generally in line with the
current quarter.  
The resource industry continues to have very strong demand for
workforce lodging and temporary workspace. This demand is being
generated from oilsands development projects, unconventional oil and
gas development, resource related infrastructure projects and mining
developments. Black Diamond is also experiencing steady demand for
drilling and completions support equipment and wellsite accommodation
assets. The ongoing demand from all three of our asset-based
operating divisions has lead to the approval of an initial 2013
capital expenditure budget of $90 million. This compares to $135
million of capital expenditures approved and committed in 2012.
Management anticipates that the 2013 capex will be allocated in the
typical non-speculative manner followed in previous years with
roughly the same weighting between business units. It is expected
that this capital program will translate into revenue and EBITDA
growth as corresponding operations and rental revenues build.  
Continued high utilization, fleet growth and strong pricing will
characterize both our Camps and Logistics divisions over the next
several quarters. The operated lodges' revenue will be similar or
slightly lower in Q4 as the Sunday Creek Lodge is being retrofitted
with two-storey dormitory complexes. Lodging revenue is expected to
rise in 2013 after the retrofit of Sunday Creek is completed and
additional facilities have been brought on stream. The space rentals
business is expected to continue to grow in western Canada with
continued strong demand. Eastern Canada and the US are expected to
generate similar revenue as the current quarter through to 2013. And,
the Energy Services division will experience strengthened rental and
operations revenue as we enter the higher activity winter drilling
months and continue to assets to the fleet. 
Our balance sheet continues to have significant capacity to meet
current and anticipated market demand for fleet additions as well as
potential strategic opportunities. 
Summary Financial Statements 
The following is a summary of the Company's unaudited condensed
consolidated interim statement of financial position as at September
30, 2012 and the audited consolidated statement of financial position
as at December 31, 2011 and the Company's unaudited condensed
consolidated interim statements of net income and cash flows for the
three and nine months ended September 30, 2012 and 2011. These
summ
ary statements should be read in conjunction with the Company's
unaudited condensed consolidated interim financial statements
including the accompanying notes for the three and nine months ended
September 30, 2012 and 2011 as filed on SEDAR.  
Black Diamond Group Limited 
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
(unaudited) 


 
(Expressed in thousands)                                                    
                                      September 30, 2012  December 31, 2011 
                                                                            
As at                                                                       
----------------------------------------------------------------------------
                                                       $                  $ 
----------------------------------------------------------------------------
ASSETS                                                                      
Current                                                                     
Cash and cash equivalents                         18,989             22,990 
Trade and accrued receivables                     70,280             47,641 
Due from related parties                               -              1,313 
Prepaid expenses and other current                                          
 assets                                           11,908              7,978 
----------------------------------------------------------------------------
                                                 101,177             79,922 
Non-Current                                                                 
Long term receivables                              4,504                  - 
Property and equipment                           387,197            301,073 
Intangible assets and other non-                                            
 current assets                                    9,946             10,778 
Goodwill                                          34,525             34,657 
----------------------------------------------------------------------------
                                                 537,349            426,430 
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Current                                                                     
Accounts payable and accrued                                                
 liabilities                                      38,509             24,708 
Due to related parties                               973              1,415 
Dividends payable                                  2,469              1,771 
Income taxes payable                               7,157                 44 
----------------------------------------------------------------------------
                                                  49,108             27,938 
Non-Current                                                                 
Long-term debt                                    86,300             86,130 
Deferred revenue                                      65                 80 
Risk management liability                          1,498              2,074 
Asset retirement obligations                       1,945              1,907 
Deferred income taxes                             43,235             38,892 
----------------------------------------------------------------------------
                                                 182,151            157,021 
----------------------------------------------------------------------------
                                                                            
                                                                            
Shareholders' equity                                                        
Share capital                                    308,439            240,350 
Non-controlling interest                           4,442              1,359 
Contributed surplus                                3,688              4,778 
Accumulated other comprehensive income            (3,909)            (2,889)
Retained earnings                                 42,538             25,811 
----------------------------------------------------------------------------
                                                 355,198            269,409 
----------------------------------------------------------------------------
                                                 537,349            426,430 
----------------------------------------------------------------------------

 
Black Diamond Group Limited 
CONSOLIDATED STATEMENTS OF NET INCOME 
(unaudited) 


 
(Expressed in thousands,                                                    
 except per share amounts)                                                  
                           Three month period ended  Nine month period ended
                                                                            
                              September   September    September   September
                               30, 2012    30, 2011     30, 2012    30, 2011
                                                                            
                                                                            
----------------------------------------------------------------------------
                                      $           $            $           $
----------------------------------------------------------------------------
                                                                            
Revenue                          74,901      63,070      195,832     175,602
                                                                            
Direct costs                     35,497      31,582       88,530      87,607
----------------------------------------------------------------------------
Gross Profit                     39,404      31,488      107,302      87,995
----------------------------------------------------------------------------
                                                                            
Expenses                                                                    
Administrative expenses           9,176       6,802       25,550      20,796
Depreciation of property                                                    
 and equipment                    9,412       6,912       24,621      19,567
Amortization of intangible                                                  
 assets                             219         375          659       1,138
----------------------------------------------------------------------------
                                 18,807      14,089       50,830      41,501
----------------------------------------------------------------------------
                                                                            
Operating profit                 20,597      17,399       56,472      46,494
                                                                            
Finance costs                     1,426       1,466        4,171       3,507
                                                                            
-------------------------------------------------
---------------------------
Income before income taxes       19,171      15,933       52,301      42,987
                                                                            
Income tax                                                                  
Current                           2,377          12        7,114          48
Deferred                          2,230       3,724        5,622      10,517
----------------------------------------------------------------------------
                                  4,607       3,736       12,736      10,565
----------------------------------------------------------------------------
Net income                       14,564      12,197       39,565      32,422
                                                                            
Net income attributable to                                                  
 non-controlling interest         1,582       1,186        2,564       2,131
----------------------------------------------------------------------------
Net income attributable to                                                  
 Black Diamond Group                                                        
 Limited                         12,982      11,011       37,001      30,291
----------------------------------------------------------------------------
                                                                            
Net income per share                                                        
Basic                              0.32        0.30         0.96        0.84
Diluted                            0.32        0.29         0.94        0.82
----------------------------------------------------------------------------

 
Black Diamond Group Limited 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
(unaudited) 


 
                                  Three month period    Nine month period   
(Expressed in thousands)                ended                 ended         
                                 September  September  September  September 
                                  30, 2012   30, 2011   30, 2012   30, 2011 
                                                                            
                                                                            
----------------------------------------------------------------------------
                                         $          $          $          $ 
----------------------------------------------------------------------------
Operating activities                                                        
Net income attributable to Black                                            
 Diamond Group Limited              12,982     11,011     37,001     30,291 
Add (deduct) non-cash items:                                                
 Depreciation of property and                                               
  equipment                          9,412      6,912     24,621     19,567 
 Amortization of intangible                                                 
  assets                               219        375        659      1,138 
 Net income attributable to non-                                            
  controlling interest               1,582      1,186      2,564      2,131 
 Unrealized foreign exchange                                                
  (gain)/loss                           15         (9)       (27)       (13)
 Finance costs                       1,426      1,466      4,171      3,507 
 Deferred income taxes               2,230      3,724      5,622     10,517 
 Share-based compensation                                                   
  expense                              967        489      2,423      1,390 
----------------------------------------------------------------------------
                                    28,833     25,154     77,034     68,528 
Book value of used fleet sales                                              
 in operating activities             1,968      7,727      5,426     11,125 
Long term trade receivables         (4,504)         -     (4,504)         - 
Change in non-cash working                                                  
 capital related to operating                                               
 activities                                                                 
                                                                            
                                    (1,046)   (14,080)    (9,465)   (51,095)
----------------------------------------------------------------------------
Net cash from/ (used in)                                                    
 operating activities               25,251     18,801     68,491     28,558 
----------------------------------------------------------------------------
                                                                            
Investing activities                                                        
Purchase of property and                                                    
 equipment                         (49,407)   (17,551)  (117,012)   (66,084)
Change in non-cash working                                                  
 capital related to investing                                               
 activities                         (1,993)     4,015      4,965     10,301 
----------------------------------------------------------------------------
Net cash used in investing                                                  
 activities                        (51,400)   (13,536)  (112,047)   (55,783)
----------------------------------------------------------------------------
                                                                            
Financing activities                                                        
Proceeds from long-term debt             -     40,072          -     86,072 
Repayment of long-term debt              -    (16,969)         -    (66,000)
Sale of shares held in trust             -          -        100          - 
Repayment of finance lease               -       (157)         -       (504)
Interest in period                  (1,365)    (1,447)    (3,962)    (3,453)
Net proceeds from issuance of                                               
 shares                             57,465       (117)    57,465     48,772 
Dividend payments                   (7,230)    (5,304)   (19,576)   (14,830)
Distribution to non-controlling                                             
 interests                               -       (557)      (393)    (1,483)
Purchase of shares in trust              -          -       (993)       (74)
Share options exercised              1,072        286      7,146      1,555 
Advances/(repayment) of                                                     
 operating facility                 (4,239)    (5,036)         -     (6,776)
Change in non-cash working                                                  
 capital related to financing                                               
 activities                           (555)         -       (174)         - 
----------------------------------------------------------------------------
Net cash from/(used in)                                                     
 financing activites                45,148     10,771     39,613     43,279 
----------------------------------------------------------------------------
                                                                            
Increase/ (decrease) in cash and                                            
 cash equivalents                   18,999     16,036     (3,943)    16,054 
Cash and cash equivalents,                                                  
 beginning of period                     -          -     22,990          - 
Effect of foreign currency rate                                             
 changes on cash and cash                                                   
 equivalents                           (10)        13        (58)        (5)
----------------------------
------------------------------------------------
Cash and cash equivalents, end                                              
 of period                          18,989     16,049     18,989     16,049 
----------------------------------------------------------------------------

 
Additional Information 
A copy of the Company's unaudited condensed consolidated interim
financial statements for the three and nine months ended September
30, 2012 and 2011 and related management's discussion and analysis
have been filed with the Canadian securities regulatory authorities
and may be accessed through the SEDAR website (www.sedar.com). 
Conference Call 
Black Diamond will host a conference call for analysts, investors and
interested parties to discuss its financial and operational results
at 4:00 p.m. MST on November 5, 2012. Trevor Haynes, President and
Chief Executive Officer, and Michael Burnyeat, Executive Vice
President and Chief Financial Officer, will be in attendance. The
call can be accessed by calling 416-340-8530 or toll free
1-877-240-9772 prior to the scheduled start time. Digital playback of
the conference call will be available under the investor relations
tab on the Company's website at www.blackdiamondlimited.com. 
About Black Diamond   
Founded in 2003, Black Diamond Group Limited is one of North
America's fastest growing remote lodging, modular building and energy
services companies. With its corporate head office located in
Calgary, Black Diamond provides world-class services to a full
spectrum of industries including oil and gas, mining, power,
construction, engineering, military, government and education. 
Through its wholly-owned subsidiaries, Black Diamond Limited
Partnership, BOXX Modular Inc. and through its 50% equity
participation in the Black Diamond Dene Limited Partnership, Black
Diamond West Moberly Limited Partnership, and Black Diamond Nehiyawak
Limited Partnership, Black Diamond operates four complementary
divisions in thirteen strategic locations across Canada and the USA.  
Black Diamond Camps rents and sells remote workforce housing and
provides associated services; Black Diamond Logistics provides
turnkey lodging services, remote facility management and supply chain
solutions; BOXX Modular specializes in renting and selling a broad
range of modular work space solutions and Black Diamond Energy
Services rents and sells a complement of oilfield equipment and
services.  
Reader Advisory 
Certain information in this news release contains forward-looking
statements including management's assessment of future plans and
operations of Black Diamond including, without limitation, statements
relating to utilization rates, fleet size, revenue, EBITDA, margins,
cash flows, capital expenditures, further deployment of equipment,
demand from existing and new customers and future dividends. These
forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond Black Diamond's control
including, without limitation, the impact of general economic
conditions, industry conditions, fluctuation of commodity prices,
fluctuation of exchange rates, environmental risks, industry
competition, availability of qualified personnel and management,
stock market volatility, timely and cost effective access to
sufficient capital from internal and external sources. As a
consequence, actual results may differ materially from those
anticipated in the forward-looking statements. Readers are cautioned
that the forgoing list of factors is not exhaustive. Additional
information on these and other factors that could affect Black
Diamond's operations and financial results are included in reports on
file with Canadian securities regulatory authorities and may be
accessed through the SEDAR website (www.sedar.com) and at Black
Diamond's website (www.blackdiamondlimited.com). Furthermore, the
forward-looking statements contained in this news release are made as
at the date of this news release and Black Diamond does not undertake
any obligation to update publicly or to revise any of the
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable
securities laws. 
In this news release, the following terms have been referenced:
EBITDA (earnings before interest, taxation, depreciation and
amortization), gross profit margin and payout ratio. Readers are
cautioned that these measures are not defined under Generally
Accepted accounting Principles ("GAAP"). Readers are cautioned that
these non-GAAP measures are not alternatives to measures under GAAP
and should not, on their own, be construed as an indicator of the
Company's performance or cash flows, a measure of liquidity or as a
measure of actual return on the common shares of the Company. These
Non-GAAP measures should only be used in conjunction with the
consolidated financial statements of the Company. A reconciliation
between these measures and measures defined under GAAP is included in
management's discussion and analysis for the three and nine months
ended September 30, 2012 filed on SEDAR.
Contacts:
Black Diamond Group Limited
Trevor Haynes
President and Chief Executive Officer
(403) 206-4737
(403) 264-9281 (FAX) 
Black Diamond Group Limited
Michael Burnyeat
Executive Vice President and Chief Financial Officer
(403) 206-4740
(403) 264-9281 (FAX)
www.blackdiamondlimited.com
 
 
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