Black Diamond Group Ltd

TSX:BDI

Earnings Call Transcript 2024-Q3

[Operator]

Thank you for standing by. This is the conference operator, and welcome to Black Diamond's third quarter results conference call. [Operator Instructions] The conference is being recorded. [Operator Instructions]

I would like now to turn the conference over to Mr. Jason Zhang, Investor Relations Specialist. Please go ahead.

[Jason Zhang, executive]

Thank you. Good morning, and thank you for joining Black Diamond Group's third quarter 2024 results conference call. On the line with us today is Chief Executive Officer, Trevor Haynes; and CFO, Toby Labrie; as well as COO of Modular Space Solutions, Ted Redmond; and COO of Workforce Solutions, Mike Ridley.

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 third quarter 2024 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 the company's website at www.blackdiamondgroup.com and also on the SEDAR+ website at www.sedarplus.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.

[Trevor Haynes, executive]

Thank you, Jason. Good morning, and thank you all for joining. I'll provide a high-level overview of operating results and key areas of focus and then pass the call over to Toby Labrie to provide additional financial highlights and a more in-depth look at each segment's performance.

I'll start by saying that I'm pleased with the performance of the company and highly appreciative of the great work being done by our team across the platform. Our long-term strategies of steadily growing our diverse MSS segment, diversifying our WFS businesses and scaling up LodgeLink are working, as evidenced in our Q3 and year-to-date results and even more so from a multi-year trend perspective. I'll provide more detail on each, but first, the Q3 high-level numbers.

On a consolidated basis, we achieved revenues of $101.2 million and adjusted EBITDA of $28.8 million, down 14% and 21%, respectively, from a very strong comparative quarter. The comparative quarter included contribution from a number of unique items upon which Toby will elaborate. The all-important return on assets, or ROA, came in at 19.3%, which is in line with the 19.9% realized in Q2 of this year. And net profit of $7.4 million and earnings per share of $0.12 are lower by 46% and 30%, respectively, when compared to Q3 2023.

Management considers rental revenue operations and rental revenue to be Black Diamond's core business. The company generated a combined $37.9 million of rental revenue in the quarter, which is up $2.6 million sequentially from Q2 but down 4% from Q3 of 2023. Of note, consolidated contracted future rental revenues as of September 30 of $163.8 million were up 27% from the prior period and up $25 million sequentially from Q2. This, we believe, speaks to the strength and stability of our core rental platform, the non-speculative nature of our growth CapEx and the steady tailwinds being experienced in end market demand, especially in education. To state the obvious, this volume of firm contracted future rental revenue provides strong forward visibility on Black Diamond's recurring cash flow generation.

Within the business units, MSS saw rental revenue grow by 11% to another quarterly record of $24.5 million. This is offset by a 23% decline to $13.4 million in WFS rental revenue from the comparative quarter, due primarily to the completion of 2 large pipeline construction camps and a large emergency relief project in the comparative quarter. However, this is sequentially slightly higher than Q2 of this year.

Consolidated utilization at the end of the quarter was a solid 75.8% with MSS at 80.3% and WFS at 63.5% compared to 80.0%, 83.1% and 73% in the comparative quarter, respectively. Overall, management believes that the company's utilization and average rental rate trends on a year-over-year and multi-year basis are very healthy in the context of current and long-term industry trends.

Year-to-date capital expenditures of $94.5 million, including $9.3 million of maintenance and refurbishment CapEx, is up $39.1 million or 85% in the first 3 quarters of '24 compared to the first 3 quarters of 2023. Fleet sales of $18.6 million compares to $13.7 million in the comparative period. Net CapEx is, therefore, $75.9 million year-to-date. This includes an acquisition of a third-party fleet for $20.5 million, which closed in Q2. The MSS fleet has increased by 981 units since Q3 of '23 or 9% to 12,299 units. The WFS fleet count has reduced by 464 units or 7% to 6,113 compared to the Q3 '23 period. Outstanding capital commitments at the end of the quarter were $17.6 million or 20% higher than comparative quarter. The majority of this CapEx is for fleet growth and with customer contracts already in place.

In summary, the underlying fleet growth is solid with a generally non-speculative complexion, which points to continued rental revenue growth and the expected growth in ancillary and VAPS revenues.

Turning now to our other revenue lines, we are very pleased with the performance of our LodgeLink business unit as it continues to scale at an accelerated pace, delivering record gross bookings of $27.2 million and record net revenue of $3.4 million, up 31% and 26%, respectively, from the comparative quarter, and up 11% and 17% on a sequential basis from Q2. Total room nights sold in the quarter rose 34% from the comparative quarter to a record 147,560. On an annualized basis, LodgeLink now handles over $100 million of gross revenue trade and growing.

MSS custom sales volumes of $16.3 million decreased 25% from a strong comparative quarter but were up from $13.2 million in Q2 of this year. Project backlog and work in process levels continue to be in line with prior year. However, permitting and site access delays continue to hamper the company's completion timelines. As such, management expects that Q4 will realize higher year-over-year sales revenues, as delayed projects from recent quarters are completed. Non-rental of $21.9 million increased 24% from the comparative quarter, due in large part to increased field-level transportation and install services, especially in the education sector. The MSS VAPS revenue grew 16% from the comparative quarter to $2.2 million.

WFS sales revenue of $4.3 million was up 126% from the comparative quarter due to continued opportunistic sales of unutilized large format camp assets in Canada. Non-rental revenue was $12.7 million, down 38%, and lodge services revenue of $8.1 million was down 51% from the comparative quarter, both due primarily to the previously-referenced lower field-level activity related to the 2 large pipeline camp projects that were completed in the comparative quarter.

As I said at the beginning of my comments, our long-term strategic objectives are being realized. MSS rental revenue has a 5-year compounding annual growth rate, or CAGR, of 22.7%, with a WFS rental revenue CAGR of 9.2%. Our consolidated rental revenue for the entire company has a compounding annual growth rate over the 5-year period of 16.8%. And LodgeLink continues to scale volumes and revenues at 30%-plus per year with a 5-year gross booking annual growth rate of 22.2%. However, this includes the pandemic-impacted years where travel spend fell significantly.

Our core rental revenues continue to grow. Our fleet performance on utilization and ROA is solid. Our future contracted rental revenue is at 5-year plus record highs. And our organic growth CapEx profile is very strong with a non-speculative complexion. Forward visibility for rental performance is very good, as is our view of continued growth for LodgeLink. Based on this visibility, the Board has the confidence to increase the company's annual dividend by 17% to $0.035 per quarter starting with Q4 of this year.

I will now turn the call over to Toby.

[Toby Labrie, executive]

Thanks, Trevor. As you highlighted, MSS rental revenue grew 11% from the comparative quarter to another quarterly record, $24.5 million. This was driven by continued organic fleet growth, the 329-unit space rental acquisition announced at the end of the second quarter and ongoing strength in rental rates with average rates up 10% from the comparative quarter.

Within the MSS segment, contracted future rental revenue increased 28% to $127.6 million, while utilization of 80.3% remains healthy. MSS VAPS as a percentage of rental revenue improved 40 basis points to 9.5% and will continue to be a value-adding proposition for our customers and a highly profitable growth opportunity for Black Diamond.

Adjusted EBITDA within our MSS segment was down 5% from the comparative quarter to $21 million due to lower custom sales revenues and a positive $2.1 million settlement in the comparative quarter. Excluding the positive settlement from the comparative quarter results, MSS adjusted EBITDA would have been up 4% for the comparative quarter.

As expected, our WFS segment was down meaningfully from a very strong comparative quarter with WFS revenue and adjusted EBITDA of $38.5 million and $13.3 million, down 31% and 39%, respectively. WFS contracted future rental revenue of $36.2 million increased 25% from the comparative quarter as we continue to focus on improving utilization within this segment, including further diversification via at-risk housing initiatives, Northern Canadian initiatives, and increasing our reach in diversified markets and industries in both Canada and the U.S. Sequentially, this represents an 18% increase in future contracted rental revenue.

As Trevor mentioned, LodgeLink continues to scale with record volumes and continues to represent only a modest drag on adjusted EBITDA. We are seeing the impacts of our continued improvements in product efficiencies, as well as process improvements, which we believe will continue to positively impact adjusted EBITDA for this business. We believe the modest continued investment in LodgeLink for the high levels of growth realized continues to represent an attractive investment.

On a consolidated basis, the adjusted EBITDA of $28.8 million for the quarter represented a return on assets of 19.3%, which is down from the comparative quarter, owing to lower WFS utilization and non-rental and sales revenues, but remains attractive in the context of the long life and low maintenance characteristics of our overall asset base.

The company remains in a strong financial position with available liquidity of $98.4 million at the end of the quarter. Our net debt to trailing 12-month adjusted leverage EBITDA of 2.2x is up modestly from the comparative quarter but remains at the low end of our target range of 2x to 3x. Average cost of debt in the quarter was 6.01%, up from 5.71% in Q3 2023, but declining with recent cuts to reference interest rates and an additional long-term swap of fixed [ for ] floating interest at attractive levels below current spot rates.

We continue to prioritize investment of operating cash flows back into the business on primarily contract-backed capital expenditure opportunities at high rates of return. Taking advantage of the healthy backlog of these opportunities has resulted in a 71% increase in year-to-date capital expenditures of $94.5 million, which has led to the modest increase in our net debt and our leverage position. This has further grown our backlog of consolidated contracted future rental revenue by 27% to $163.8 million, leaving us enhanced visibility on future cash flows and the ability to increase the quarterly dividend by 17% or $0.035. This is the company's fourth increase since reinstituting the dividend in 2021.

As noted in prior quarterly calls, the company has been undergoing an ERP system upgrade as part of our focus on operational excellence and cost efficiency. The company has transitioned LodgeLink to the new ERP and has now begun the implementation for the MSS and corporate business units. Management expects this phase of the new system to go live in early 2026 with a total budgeted investment of $11.9 million, including all third-party implementation, software licensing and internal costs for the overall implementation.

In summary, we believe Black Diamond is well positioned to continue generating compounding returns through our disciplined capital allocation approach, which has resulted in continued strong growth in our MSS rental revenues and consolidated future contracted rental revenue for the company, both at record levels and setting us up well for future growth.

In addition to our base of contracted rental revenue, our balance sheet affords us ample available liquidity to support both organic and inorganic growth initiatives, while the systems and processes we have put in place allow us the flexibility to adjust our capital allocation plans by region or sector to optimize for dynamic market conditions.

Despite the softer year-over-year results for this particular quarter, we remain pleased with the strength and diversity of our specialty rental platform, which continues to inform our outlook for continued growth through the balance of the year and heading into 2025.

With that, I'd like to turn the call back to the operator for questions.

[Operator]

Our first question comes from Betty Yang of Canaccord.

[Betty Yang, analyst]

This is Betty on for Matt Lee. My first question is on the WFS side. It looks like your sales pipeline remains robust, but the pace of project conversion seems slower than initially anticipated. Could you provide more insights into the current pipeline of opportunities and share your expectations for the project conversion timeline? And should we anticipate an acceleration in activity by mid-2025?

[Trevor Haynes, executive]

I couldn't hear the first part of your question. We're getting quite a bit of feedback on the line. I wonder if you could just repeat it again for us.

[Betty Yang, analyst]

Yes. So, for the WFS side, could you provide more insight into the [ current level ] of opportunities and share your expectations for the project conversion pipeline?

[Trevor Haynes, executive]

So, for WFS, our forward view on our pipeline and conversion into projects going into '25, I guess, to the extent that we can talk about that, Mike, if you would give some color on what we're seeing in the WFS business in terms of our opportunity pipeline and how that informs forward outlook?

[Michael Ridley, executive]

Sure. Thanks, Trevor, and thanks for the question, Betty. We've been saying now for several quarters that we've really -- our core strategy continues to be sound as we focus on various parts of the business in our world, in Australia, with education and strategic camp opportunities in our space rental business. We're quite bullish on that, and we anticipate seeing growth in the Australian market. The U.S. business is also very sound, and we'll continue to see sort of strategic opportunities and growth in that. And where we can, we'll pull Canadian assets through on projects in the United States. And then, when you come over to Canada, we've put a big focus on at-risk housing and on disaster relief, which we certainly benefited from Q3 of last year, which was a big needle mover. So we positioned ourselves quite well on those opportunities as it ties to disaster sort of going forward. We all read the newspaper and watch the news and see the hurricanes that are going down in the U.S. and forest fires that seem to be a yearly occurrence in Canada and the U.S. for that matter. And we do believe when we look ahead, there will be some opportunities sort of tied to other sort of projects across Canada. The pipeline is probably not as strong as we would have thought it would have been. But that being said, there are still a fair amount of active opportunities that we believe will continue to help grow our business across the board.

[Betty Yang, analyst]

I wanted to ask another question on Modular Space Solutions. MSS rental revenue [ was at ] record level this quarter, and the monthly rental rate was particularly impressive at $847. Could you share more insights on what drove the year-over-year improvement? And how much did a higher proportion of VAPS revenue contributed to that? And also, what is your outlook going into 2025?

[Trevor Haynes, executive]

The question is -- so, we're having some difficulty hearing the audio here.

[Betty Yang, analyst]

Yes. Sorry about that.

[Trevor Haynes, executive]

With regard to MSS -- sorry, yes, if you could repeat that, Betty?

[Betty Yang, analyst]

Yes. So for MSS rental rate, very impressive this quarter. So I want to know how [ much the ] higher proportion of VAPS revenue contributed to that? And also what's your outlook going into 2025?

[Trevor Haynes, executive]

Okay. So rental revenue growth, what's driving that and how much is VAPS influencing that, Ted?

[Edward Redmond, executive]

Well, so VAPS is up from $1.2 million in the comparative quarter to $1.4 million. So VAPS is a modest contribution, but it's a growing contribution. So as Toby said, our VAPS as a percent of rental revenue has gone from 9.1% to 9.5%. We have a strong pipeline of rental revenue, as we talked about, $128 million, up significantly year-over-year. And our VAPS pipeline is very strong as well. And we're seeing very good VAPS wins with year-over-year VAPS wins up significantly in our sales pipeline.

[Operator]

Our next question comes from Frederic Bastien of Raymond James.

[Frederic Bastien, analyst]

I was wondering if you could break down the growth CapEx of around $93 million. Where is that deployed? Which markets are they being deployed into?

[Trevor Haynes, executive]

The $94 million of gross CapEx, keep in mind, $20.5 million of that was related to the acquisition we completed at the end of Q2. So, if you net that off -- well, even there, those assets are in Western Canada, focused in Northwestern British Columbia, tied to a large LNG project. When we look more broadly across the entire platform where we're seeing capital being deployed, and [ I'll get ] Ted to give a bit more color in a minute here, but we are seeing a significant amount of CapEx going into the education sector, certainly through our CLM business in Ontario, significant growth in total capacity of that platform, but also across our U.S. operating regions, U.S. -- or sorry, Northeast, Mid-Atlantic, Southeast and into the Gulf Coast for education, but also for general modular. We're seeing really strong demand along the Gulf Coast, Texas branches, all the way through to our Atlanta branch and up the East Coast of the U.S. We're also deploying in Australia for education and for our general modular platform there, as well as selectively into our Workforce business, where we're seeing really high utilization of certain asset categories in what we refer to as our small format, which is more of our rapid deployment, smaller camps that work upstream oil and gas, as well as smaller projects across the board. And so, we're investing across the platform in all 3 businesses and in all 3 countries. I would say, what is outsized on a proportional basis would be education.

Ted? And I don't know to what extent you would add to my comments in that regard.

[Edward Redmond, executive]

Not a lot to add. Significant going into education, and then, significant amount going into the U.S. market, which has a large education component in the U.S. as well, as well as general rentals, especially in Texas, but again, across the platform in the U.S.

[Frederic Bastien, analyst]

Maybe next question, it's related -- maybe to Toby. How much free cash flow can we expect Black Diamond to feed into your growth on a go-forward basis? You obviously have choices to make between acquisitions and just organic CapEx. But what's the actual dry powder that you technically deploy on an annual basis on growth?

[Toby Labrie, executive]

Yes. Thanks, Frederic. So, as we continue to prioritize investments into the business, we continue to see attractive rates of return on the CapEx that we've just been talking about. And so, our [ hurdle rate of ] returns at 20% plus are very attractive in the context of our available opportunities. And so, we are prioritizing that investment back into the business. So, a lot of our free cash flow does go back into the business in the form of both organic and inorganic capital. We do obviously pay a modest dividend with a modest payout ratio. We think that continues to be important. We've just announced an increase there. But as a proportion of our free cash flow, it remains approximately the same, as we see that continuing to grow with our growing rental revenue. We've also utilized the NCIB at times when the share price has been opportunistic. And so, with those other modest forms of our use of free cash flow, we've kind of reinvested the rest of it into the business, and we continue to see those opportunities. And so, we continue to expect that same cadence going forward.

[Trevor Haynes, executive]

I would just add to that, that after all the cash expenses of the business, including our lease expense, after [ ROU ], dividend, interest, et cetera, all of the remaining cash flow is available for reinvestment in the business. Unfortunately, we're seeing demand to absorb that and to absorb it in a way where it's essentially non-speculative. We're able to match up customer contract commitments with the organic CapEx, and so -- and meet our hurdle rate of return that we set internally. So what we're seeing is the ability to deploy pretty much all of the cash flow generation net of the various cash items, which Toby had touched on.

And then, as we look at acquisition or inorganic growth, we would view our healthy amount of borrowing base capacity on our asset-based lending facility as the funding source for any acquisition of significance, and keeping in mind, as we're buying asset-based businesses, we also increase our borrowing base on the ABL. So that's the way that we set our investment framework for the company, and it's been working very well.

[Frederic Bastien, analyst]

Maybe last one for now. Trevor, on that note on M&A, how are you feeling about the pipeline today versus maybe where it was at the beginning of the year?

[Trevor Haynes, executive]

I don't think too much has changed when we look at our pipeline at this point in time versus the beginning of the year. We continue to track a number of opportunities that we think would fit well for the company. However, we will stay disciplined. We think our track record on the larger acquisitions we've done has been very good, and we don't see any reason to change our methodology, whether it's value or quality or the people aspects that come into consideration. So I would say that our positioning opportunity-wise and our view of our methodologies for M&A are consistent with what we've seen over the last several years.

[Operator]

The next question comes from Trevor Reynolds.

[Trevor Reynolds, analyst]

I was just wondering if you could give a sense of the timing on the ERP expenditures over the next year.

[Trevor Haynes, executive]

Yes. So, the -- as I mentioned, the expected timing of the implementation and the spend of the $11.9 million is essentially over the next 18 months or so, and we expect that to -- we expect the implementation to go live in early 2026. And so, while the expenditures won't be perfectly even over that period, it will be roughly spread out over those 18 months.

[Trevor Reynolds, analyst]

Okay. Great. And just -- I mean, obviously, we've seen some of these ERP projects go awry in the past. Maybe just like your level of comfort with your budget expectations and also kind of the implementation and how straightforward that is potentially?

[Trevor Haynes, executive]

Yes, that's a great question. It's something we've been thinking a lot about for a number of years, and we spent a lot of time examining this exact issue, what does go wrong typically and how to prevent that and looking at examples of companies that have done it right as well. And so, we've gone into this eyes wide open. We've put a robust plan together, and we believe we put a solid plan with the resources and time required to be successful in this. So I am confident that we are able to deliver this ERP successfully within the current budget and timeline that we've set out.

[Toby Labrie, executive]

And that was one of the reasons we did the LodgeLink implementation first. It's the same -- it's a different implementation, but the same system. So we've learned additional things about that system from the LodgeLink implementation.

[Trevor Reynolds, analyst]

Perfect. And then, maybe moving just to Australia, I'm fairly certain you guys have rolled out LodgeLink there now. Maybe just some commentary on how that rollout is going.

[Trevor Haynes, executive]

Yes. We were positioned in the market -- it was either June 1 or July 1. To get a marketplace up and trading, you need supply and then you need demand. So we've had pretty good success on the supply side in terms of signing up hotel and lodging brands and individual properties. We're actively working our demand side pipeline, our sales pipeline, to bring companies that need to move their workforce crews more efficiently to match up with the supply side. So we're well along. We've got some strong team members in the country now, and we expect that this will be a meaningful part of the LodgeLink footprint, given the amount of workforce travel that occurs in Australia, given the remoteness of a lot of their infrastructure and resource and the concentration of population in the very nice cities along the east coast there. So we know the need is there. We're working our way through being set up to be able to handle the trade.

[Trevor Reynolds, analyst]

Got it. And then, one last one just on Australia. Utilization was down year-over-year there. Maybe just remind us what that's related to and where you kind of see the optimal utilization in Australia.

[Trevor Haynes, executive]

It's important to characterize our Australian business as a bit of a microcosm of our North American rental businesses. We've got 3 components essentially. We have a rental component -- or I'm sorry, have an education sector component, where we provide modular buildings for schools or temporary classrooms. We have an MSS style general modular for general rentals. And then, we also have a remote camp business. And so, similar to North America, we see variability on the camp side of things, and that's one of the bigger impacts. I'll get Mike to comment in a second here. The other 2 are pretty stable, especially the education market. So we are seeing continued growth in education, good stability around our space rentals and then that variability in the camp business.

Mike, anything you'd add there?

[Michael Ridley, executive]

Yes. Just a couple of other comments. The market, in particular, in Sydney was softer than we anticipated. So we expect upside in that area for sure, Trevor, as well as we opened up a branch in Melbourne. So we've had assets sort of slowly coming into the market that will get utilized in the months ahead would be the other drivers that would have caused some of the lower utilization, but we anticipate it increasing.

[Trevor Haynes, executive]

Maybe touch on the camp business there just for a bit more color, opportunity and also the variability.

[Michael Ridley, executive]

Yes. The camp business, we are, again, also optimistic that we'll see improvement in that area. There are some projects that just didn't come to fruition, but we're anticipating coming on in, again, the months and the quarters ahead. And we will utilize capital in those areas with the right customers and the right returns as well to help to continue to grow that part of our business in Australia.

[Trevor Haynes, executive]

So we do remain optimistic with regard to our Australia business. A little bit of a flat period for results, but we think all the characteristics are there. And as Mike mentioned, we've got some proactive strategies to continue to grow the business. So we have a positive view going into '25 for continued growth and performance of our Australia business.

[Operator]

Our next question comes from Frederic Bastien of Raymond James.

[Frederic Bastien, analyst]

Just wondering, the rental rate growth in the quarter was pretty awesome on the MSS side. How long does that continue?

[Trevor Haynes, executive]

Yes. Thanks for noticing that, Fred. We're continuing to push rates, and we think we've got a generally favorable environment for doing so and some time to catch up on renewals still. Ted?

[Edward Redmond, executive]

Yes. It's -- we've got a lot of that rental rate increases on long-term contracts. So that's going to continue and be steady. So we think we can steadily increase rental rate for a significant amount of time. Our markets remain strong, especially the U.S., but Canada as well has been really steady and absorbing significant assets as well. So we've been investing significant capital. A lot of that -- majority of that is on project-specific quotes. So we quote on a project, and then when we win it, we spend the capital. So it's not speculative. And we're seeing a continued strong pipeline of quoting and opportunities. So...

[Trevor Haynes, executive]

What are you seeing specific to rental rate growth on renewal?

[Edward Redmond, executive]

Yes. So that's driving, I guess, new rental rate. And again, on the renewal side, we're still seeing really good rental rate momentum on the renewals. So when those 5-year contracts are coming up for renewal, we're getting significant increases on those. And even some of the shorter-term contracts, we get less of an increase on a shorter-term contract, so a contract that's maybe been just like a 9-month contract, has already been -- we've increased the rental rate a couple of times as we renewed those, but we're still seeing increases on some of those. So the year-over-year increase has been in that kind of 7% to 10% range over the last 3 years or so. We see that continuing, maybe not quite at that same rate, but we're still expecting significant increases in the rental rates.

[Trevor Haynes, executive]

Probably in the high-single-digit percentage growth would be a reasonable estimate of year-over-year rate increase.

[Operator]

This concludes...

[Trevor Haynes, executive]

That's on an average rate basis.

[Operator]

I would like to turn the conference back over to Mr. Trevor Haynes for any closing remarks.

[Trevor Haynes, executive]

I thank you all for joining and your interest in the Black Diamond story, and I wish you a very good day. Thank you.

[Operator]

The conference is now concluded. You may disconnect your lines. Thank you for participating, and have a great day.