The company faces challenges with project conversion timelines in the WFS segment, potentially delaying expected revenue growth into mid-2025.
Q: Could you provide more insights into the current pipeline of opportunities for the Workforce Solutions (WFS) segment and share your expectations for the project conversion timeline? A: Trevor Haynes, CEO, explained that the WFS segment is focusing on strategic opportunities in Australia, the US, and Canada, particularly in education and disaster relief. Mike Ridley, COO of Workforce Solutions, added that while the pipeline is not as strong as anticipated, there are still active opportunities that are expected to grow the business.
Q: MSS rental revenue was at a record level this quarter. Could you share more insights on what drove the year-over-year improvement and the outlook for 2025? A: Edward Redmond, COO of Modular Space Solutions, noted that VAPS (Value-Added Products and Services) contributed modestly to the growth, with a strong pipeline of rental revenue and VAPS wins. The outlook for 2025 remains positive with continued growth expected.
Q: Could you break down the growth CapEx of around $93 million? Where is it being deployed? A: Trevor Haynes, CEO, explained that the CapEx is primarily focused on the education sector across Canada, the US, and Australia. Significant investments are being made in the US market, particularly in Texas and along the Gulf Coast, as well as in Australia for education and general modular platforms.
Q: How much free cash flow can Black Diamond expect to reinvest into growth on a go-forward basis? A: Toby Labrie, CFO, stated that the company prioritizes reinvesting free cash flow into the business, focusing on both organic and inorganic growth opportunities with attractive returns. The company maintains a modest dividend payout and utilizes share buybacks opportunistically.
Q: How is the ERP system upgrade progressing, and what is the expected timeline for implementation? A: Trevor Haynes, CEO, mentioned that the ERP system upgrade is expected to go live in early 2026, with expenditures spread over the next 18 months. The company is confident in delivering the project within the current budget and timeline, having learned from the LodgeLink implementation.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.