Randel Madell - Investor Relations Trevor Haynes - President, Chairman and Chief Executive Officer Toby Labrie - Executive Vice President and Chief Financial Officer Troy Cleland - Executive Vice President and Chief Operating Officer, North America

Jason Zhang - Cormark Securities Jon Morrison - CIBC World Markets Jeff Fetterly - Peters & Co. Ltd. Brian Pow - Acumen Capital Market Ian Gillies - FirstEnergy Capital Corp.

Good morning. My name is Randel Madell, Investor Relations Specialist for Black Diamond. At this time, I’d like to welcome participants to Black Diamond’s first quarter 2016 results conference call with President, Chairman and Chief Executive Officer, Trevor Haynes; and Executive Vice President and Chief Financial Officer, Toby Labrie. We are also joined today by Executive Vice President and Chief Risk Officer, Paul Wright; Executive Vice President and Chief Operating Officer, Troy Cleland; Black Diamond Logistics President, Steve Stein; and Executive Vice President International, Harry Klukas. After our formal remarks, there will be a question-and-answer session. At this time, all lines have been placed on mute to prevent any background noise. Please note that while talking about our results and answering questions, we may make forward-looking statements. These statements are subject to known and unknown risks, and future results may differ materially. We will also be discussing non-GAAP financial measures in today’s call including adjusted EBITDA, net debt, funds available for dividends and payout ratio. For more information about these topics, please review the sections of Black Diamond’s first quarter 2016 Management’s Discussion & Analysis, entitled Forward-Looking Statements, Risks and Uncertainties and Non-GAAP Measures. This quarter’s MD&A, news release and condensed audited financial statements can be found on our website at www.blackdiamondgroup.com as well as the SEDAR website. Dollar amounts discussed in today’s call are expressed in Canadian dollars and are generally rounded. I will now turn the call over to Trevor Haynes to review the quarter. Trevor?

Thanks, Randel. We continue to maintain a strong focus on cost and cash management. Year over year, we have reduced our administrative cost by 25%, our monthly dividend by 65%. And in the first quarter, we reduced our 2016 capital program by $15 million. These actions reduced our payout ratio year over year and allowed us to pay down additional debt in the first quarter, leading to a 20% year-over-year decline in long-term debt. This leaves Black Diamond with approximately $106 million in available liquidity and a strong balance sheet with a net debt to adjusted EBITDA ratio of 2 times. We believe that ongoing cost discipline and available liquidity provide us with financial flexibility, optionality and sustainability to continue to execute on near-term opportunities. This is the theme you’re going to hear us return to later in the presentation. I will now turn the call over to Toby for the consolidated financial review. Toby?

Thanks, Trevor. As many of our listeners are aware, Black Diamond reorganized its North American business units effective January 1, 2016. On April 19, 2016, we press released the 2015 financial and operational results to reflect this new structure. This slide illustrates the new segmentation and compares the performance of our business units in the first quarter of 2016 with the first quarter of 2015. Total adjusted EBITDA for the quarter was $17.2 million, down 44% or $13.4 million from last year. Similar to last quarter, adjusted EBITDA declined year over year across all of our Western Canadian operations due to ongoing weakness in the resource sector. Camps & Lodging adjusted EBITDA declined by $11.2 million, primarily due to a decrease in average beds utilized and a decrease in revenue per available room. The impact of the weak resource sector on BOXX Modular resulted in a $1.7 million reduction in adjusted EBITDA or was partially offset by revenue growth in United States. Energy Services adjusted EBITDA decreased by $2.2 million, due to a decrease in utilization and rates related to the downturn, and drilling and completions activity in Western Canada, North Dakota and Colorado. International results were also lower due to continued headwinds in Australia’s resource sector. Corporate and other adjusted EBITDA which excludes administration costs in the business units improved by $2 million due to headcount reductions, efficiency improvements and cost containment initiatives. I will now review a few key financial metrics on the next slide. We recorded a net loss for the quarter of $2.4 million, compared with a net profit of $9 million in the year before, due to lower operating income and the write-down in the investment and note receivable from Northern Frontier Corp. The payout ratio was 30% for the quarter, compared with 36% the year before due to the two dividend decreases we enacted since November 2015. The full impact on cash outflows of the second dividend reduction announced in March 2016 won’t be fully realized until the second quarter of 2016. I will now turn the call back over to Trevor.

Thanks, Toby. In the first quarter, we continue to adjust our calls on cash to adapt to the current business environment. Please note that this slide does not take into account changes in working capital. Due to the low maintenance capital requirements of our rental fleet, and the availability of existing assets that we can deploy for new business, we have been able to significantly reduce capital expenditures. This graph shows the impact of our reductions in CapEx and dividends on cash flow for the past two quarters. Our continued discipline in the first quarter allowed us to post positive cash flow, despite declining EBITDA. We excited the quarter with $2.6 million in capital commitments and our 2016 capital program remains a $10 million in total. Our BOXX Modular platform is continuing to see growing demand as industrial and general construction spending increases across North America. One area of operational focus is market expansion, which is why we have commenced operations in California and Oklahoma. This gives us exposure to new markets and major project opportunities. We are also looking at other markets to further increase Black Diamond’s exposure to additional customer segment, industries and geographies. There has been an unprecedented increase in Canadian infrastructure spending commitment at the federal and provincial levels. The government of Canada recently announced plans to invest $120 billion over 10-years in infrastructure. In addition, many Canadian provinces have recently made significant infrastructure investment commitments. For example, the government of Alberta has announced plans to spend $34 billion over five years, the Ontario government has announced to $130 billion in spending over 10-years and the BC government is planning to spend $12 billion over the next three years. We are actively positioning our BOXX Modular platform to capture business, as infrastructure spending expense in North America. Consolidated contracted future revenue at the end of the quarter was $64.2 million, down 45% from last year due to lower market activity resulting from lower commodity prices. For comparison the contracted revenue was $81.8 million at December 31, 2015. As commitments have expired on existing camps in Western Canada, some of these facilities have shifted to an open camp format. For example, while Sunday Creek’s contracted commitments were substantially met during the first quarter, a lot remains open and continues to serve various operators in the Conklin area. The BOXX Modular business unit achieved 33% increase in contracted future revenue in the quarter, including new contracts in Western Canada, Eastern Canada and the United States. International also increase contracted future revenue in the quarter as a result of five year contract extension were $6.2 million. Black Diamond’s business platform continues to generate positive cash flow from its diverse fleet of long-lived specialty rental assets. This allows us to continue to pay down debt through our ongoing focus on cost and cash management. The defensive strategy, we have employed over the last year has allowed us to maintain financial flexibility, optionality and sustainability. The size of our modern fleet valued at more than $500 million gives us tremendous operating leverage. We are well-positioned for the eventual recovery of the resource sector and to capture opportunities as the non-resource sales channel bills. Despite this, although look for the near-term, the forward outlook has become more constructive, with an element of stability coming back into the marketplace. We currently see opportunities stemming from infrastructure and pipeline investments that we expect to have an impact on revenue in the latter part of 2016 and onward. Management is becoming increasingly aggressive and pursuing market opportunities, which may include a combination of acquisitions entering new markets and scaling up existing BOXX Modular operations. In addition, we are looking to expand product line services offered to create new value enhancing concepts for our customers. With that, I’ll ask the operator, to open the call for questions.

Thank you. [Operator Instructions] Our first question is from Jason Zhang with Cormark Securities. Please go ahead.

Thanks. Is there anything one-timeish in nature in BOXX Modular in the quarter? EBITDA margin seemed a little bit lower just given how strong revenues still sort of were?

Yeah. Thanks, Jason. We did experience some used fleet sales in the quarter, which were at a relatively lower margin and would have impacted those margins.

Okay. Were the branch-openings are part of it as well or not really?

Not really, we did mention in our MD&A that we are repositioning some fleets around to various locations to try and take advantage of market opportunities. So there is some cost associated with that.

Okay. And then can you - within the Camps & Lodging side, can you help us understand sort of the - maybe what the contracted base in your rental and lodging revenue looks like in the first quarter. So I think the Camps & Lodging probably generate about $28 million together in revenue. How much of that would have been contracted versus month to month?

Yes, if you look back at - if you take a look at our contracted revenue for Camps & Lodging and perhaps back into that little bit for Q4, and comparing that to what we have remaining at Q1, you’ll see that most of that - almost all of the revenue for rental and lodging in Camps & Lodging segment in Q1 was contracted as of the end of Q4.

Okay. So what was the end of - what was the Q4 Camps & Lodging contract book, so call it, 36 is today, what was it in Q4?

At Q4, it was approximately 25.

Okay. Okay, thanks guys. That’s it for me.

Thanks, Jason.

Thank you. Our next question is from Jon Morrison with CIBC World Markets. Please go ahead.

Good morning, all. Can you give any color on the magnitude of your platform in the Southern U.S. market in BOXX today either in terms of number of assets or book value that’s in the market today?

Yes. I can answer that. In terms of the number of assets that we have in the U.S., I would say of total fleet count you’d be looking probably in about a third of the size is in the U.S.

Okay. And is that all Southern U.S. at this stage?

Yes.

If you guys end up seeing solid growth opportunities in that market, I’m wondering, did the economics go around in terms of relocating idle assets from Western Canada or do you have to look at building new assets to build out some of the demand markets either from a spec-perspective or it just doesn’t make sense to move it from a transportation cost?

There it would be prohibitive to move assets, our Canadian assets down to the U.S. Some of it has to do with coating, just the electrical, other of it has to do with very specific state requirements, tools that they have. And just the overall transportation cost wouldn’t make sense to do that. Relocating from one program to another in Canada does make sense and that’s some of the programs that we’re looking at right now would cross border from Canada to U.S., that would not be some that we’re looking at.

Okay. You talked about Sunday Creek’s base utilization commitments having being met. And I was just wondering if you can give any sense of what utilization in that facility would look like today and what are there any plans to dismantle or scale back to facility based on your line of sight with new customers at this point?

Sunday Creek remains open, we don’t have contracted revenue - significant contracted revenue, but we have activity, but short-term outlook is fairly minor.

Okay. But there is no plan to scale back the facility today?

No.

Okay. Within the camps and logistics segment, non-rental revenue is up fairly meaningfully on a sequential basis. I was just wondering if you can give any color on whether that represented new camp construction are dismantling or whether any used fleet sales in that number to think about?

There were no fleet sales involved in that number, there were just some general operations, but some of them dismantle of a large or a certain amount of larger cap. But nothing abnormal from [indiscernible].

Other than new growth opportunities that you guys referenced in the infrastructure and pipeline investment side, would the majority of those we would be satisfied with existing assets that are free to be rented at this point or would you need to contemplate some form of a capital increase should be success from those awards?

We are looking at a multitude of different opportunities. If you look at accelerating growth in the U.S. for our BOXX Modular platform, which a scenario where we are interested in expanding, there is an opportunity to acquire assets versus moving assets around as Troy mentioned based on logistics and various code issues. If you look at our expansion in Canada, we look at that is the opportunity to relocate access or excess equipment that is come out of the Northern resource areas, moving more than to urban areas. We are receiving a significant uptick in activity, largely related to the infrastructure projects from government funding, will also from more general commercial and industrial construction on the private sector. So spreading the Western fleet out into other market would be redeploying existing assets.

Got it. Last one just for me, when you guys are selling camps or blocks from your used fleet sales. Are you still selling at a premium to your carrying value and can you give any sense of how pricing of used market or used equipment has trended over the last 12 to 18 months?

We do continue to trade in sale of existing assets. And we’ve been successful through the quarter at - or greater than book value. The volume of trade differs based on the asset base, plus transactions around surface rental assets these days, but certainly around the BOXX Modular assets and in some occasions with regard to camp assets. So we are comfortable with the asset value certainly on a normal life long-term basis is correct? And even in the current market, we have support trough how our team is selling assets?

Appreciate the color. I’ll turn it back.

Sure.

Thank you. Our next question is from Jeff Fetterly with Peters & Co. Please go ahead.

Good morning, everyone. Quick question on the Aussie side, the $6.2 million contract. Is that sufficient to retiring that business to a profitable EBITDA level?

We won’t see - we see an incremental increase of the revenue and the profitability associating to that contract, because an essential we get it, we are able to renegotiate and renew from the have [ph] security for another five years or sixty months of contracted revenue. And we’ve also been able to strengthen our relationship with the leading iron ore producer in the country, but that to answer your question will not have a huge impact on the EBITDA or the profitability. It will maintain where we’re at.

Are there levers available in the near-term to return that business to profitability?

We’re encouraged by the activity that we’re seeing in the infrastructure, much same as Canada, maybe even on a larger scale. But you have to factor in the demands for primarily space rentals and smaller camps. We have the ability with the assets that we have which are typically - or primarily in the key areas of modvian [ph] in Sydney, Brisbane and Perth. They’re underutilized so we can with incremental capital cost increase our revenue quite significantly.

Okay. Trevor, your comment around seeing or starting to see an element of stability coming into markets, can you elaborate in terms of what exactly you’re seeing or what you expect to play out?

Well, the comment comes from activity in our sales channel and with our key customers and looking at some element of infrastructure around pipe occurring later this year and into early part of next year, and then the expectation that with - just presuming that we are finding out a range for the price of oil somewhere in where we are at, that we will see some of the maintenance work on larger physical plant that has been deferred up to this point moving ahead. And that leads to more laborers in the field which represents occupancy for the camp business. And so, based on what we’re seeing and hearing right now and also looking at the commodity price, we think we began having a situation where our customers can make decisions around some elements of maintenance and optimization. It maybe some time yet, before we see any - and I think there will be quite some time before we see any greenfield projects in the oil sands. But for us to see some recovery in terms of occupancy and rates and revenue, we don’t necessarily need to get there right away. We need our customers to have some visibility to be able to continue to work on and around their projects. And that’s where we’re getting a sense that we’re closer to those decisions being able to be made than we were at the end of the last quarter.

I mean, I thought - yes, sorry go ahead. Sorry go ahead…

Okay. I was just going to point to the other sense of some degree of visibility is what we’ve been talking about around the BOXX Modular platform where U.S. general construction spend, looking at a variety of indirect indicators suggest that we’re continuing to see growth along the Gulf Coast and into Southern California, Southwest States which is where we’ve been focused on expanding. And then in Canada we’re seeing per signs more so in the Southern Ontario market where there seems to be a fair amount of infrastructure projects already kicking off. And our larger construction customers seem to be getting quite active and we’re seeing our participation as a derivative of that activity. And we think that continues based on what we’re seeing in our sales cycle right now. So those are the signs that we are seeing that causes to feel more constructive of what in terms of stability and what we think maybe a return or a modest return to strengthening utilization. It maybe some time before we see rates recovering then.

On the camps and catering side, some of these incremental demand signals, is that what you expect will help loading of existing facilities or are they in terms of incremental opportunities that would require new facilities or relocation of facilities?

Two of those three, one, increasing loading in existing facilities such as Sunday Creek or possibly higher occupancy at given our - even our Horn River lodge or up into our lodge we have in the Fox Creek area and our other location in the Sydi [ph] area. And then other would be the relocation of existing assets, which would be the more likely scenario for activity around pipeline and shorter-term infrastructure built, where we are seeing some activity. The need for new assets, I think it’s a quite some ways out, in terms of the manufacturing cycle, simply because of the amount of available capacity in the marketplace. So we’ll see that being absorbed in place or getting relocated to meet incremental demand.

You’ve recently talked about trying to increase market share, pursue opportunities to further your market share. Is that still something that’s a top priority or a priority in strategy?

Yes, just for sure. One thing that we’re looking at with a sense of stability, and in terms of more stable markets and a rebuild of our sales channel is whether or not we have the confidence to be more aggressive. We have had an aggressive personality as a business over the first 10 to 13 years. And we would like to get back to that, which would be looking at market share pickup, displacement of our competitors at key locations moving into markets that we’re not currently in aggressively. We’re gaining much, much closer with our customers, with some unique value propositions that only our business model can offer versus our integrated competitors. So I think you would see us, and we already are becoming more proactive in that regard.

Thank you. I appreciate the color.

Thank you. Our next question is from Brian Pow with Acumen. Please go ahead.

Good morning. Trevor, I think you answered most of your sort of outlook therein. But I just wanted to get a better sense you talked about potentially expanding your product offering. Can you elaborate a little bit more on that?

Well, we have been migrating towards more turnkey management and a more sophisticated value model with our customers, where we can manage more of the spend related to laborers or workers being housed. And we think as our customers start to looking more constructively at what happens over the next couple of years, ways and which we can deliver efficiency and improved performance. In that part of their spend, and in ways that we can share the risk and the reward with them, is very much on the table and in discussion, which we think helps us pickup market share and also helps us expand where we offer to the customer. We are also looking at other products that are complementary to our core modular buildings, and that would be more in the modular space BOXX Modular platform, as a way to secure more of the spend at a construction site are coming into our channel, as an example. And then, as we mentioned covering more territory and more customer segments. So we’ve got a multi-pronged strategy, in terms of advancing our business in this environment.

Okay, that was very helpful. And then just with your thought that there is not a lot of need for new assets. Maybe you can just speak to sort of the health of that supply anyways in terms of if and when that demand comes again, how would you see your various suppliers making that through the current downturn?

It’s a concern, but it’s a concern for some ways down the road, where we are engaged with customers in delivering custom modular buildings, which is something we do with some frequency in the BOXX Modular platform. We do have enough capacity available to us. Our U.S. manufacturers are a relatively strong and able to continue servicing us. And the same is true with our specialty manufactures in the Canadian marketplace. The concern would be around the large volume camp production, and whether or not those participants can keep those factories busy and many of them are trying to chase the hotel business and the large-format custom modular. I’d be curious to see what success they’re able to generate there. But at some point in time, if we see a sizeable recovery or if something of scale causing our marketplace to change meaningfully, such as LNG going ahead or more than one of the big pipe projects are going ahead at one time, Energy East and Trans Mountain as an example, then we would get closer to that concern. But my guess would be a couple of very longstanding privately owned manufacturers of size will survive. They survived all the other downturns that we’re seeing over the last 30 years. So there will still be capacity.

Okay. And then, maybe just a final question regarding sort of infrastructure spending, things like that, I mean, it’s obviously something that’s been promised at the high level. But - do you see projects moving forward at a reasonable pace or is there still sort of lots of promise and lack of delivery in terms of getting them on the shovel?

The public sector projects you’re asking?

Yes, yes.

We’ve been, I would say, pleasantly surprised by what’s happening in Eastern Canada, specifically the Greater Toronto area. Now, some of those projects have been in the works for a while. They’re just being accelerated such as the subway and rail expansion and some highway expansion et cetera, Troy…

Yes, the feedback we’re getting from our Eastern Canadian operations is some of their clients are actually identifying that this is the result of federal governments’ initiative for infrastructure spending, whereas in Western Canada there may be some opportunities that are there, but that they haven’t come out and indicated it so far. There are some opportunities of the infrastructure such as the Ring Road in Calgary. And anytime I drove up to highway to corridor there up to Edmonton you continue to see a lot of development in that Edmonton area as well.

Okay, great. I appreciate the insight, guys. Thanks.

You too.

[Operator Instructions] Our next question is from Ian Gillies with FirstEnergy. Please go ahead.

Good morning, all.

Good morning.

EBITDA margins in the Camps & Lodging segment was up quite a bit quarter over quarter and I was wondering if you could talk about the repeatability or sustainability of that margin moving forward, based on what you see today.

Yes, I think the primary driver of that, Ian, is actually the balance of rental and lodging revenue against the non-rental piece. And as far as the sustainability, I think the margins themselves if you were to assume a similar ratio between those two pieces of - or those parts of our revenue, I think it is maintainable.

Okay. Thanks very much. And are you able to provide any color in the lodging beds number that was reported in Q1? What percentage of that would have been the large customer in Sunday Creek where the contract is now finished up?

We don’t have that breakout available. We have not disclosed details of the contract. I would say oil sands revenue in general, which would be heavily weighted to Sunday Creek, would have been about…

In that 30% range for Q1.

…for Camps & Lodging.

Okay. Thanks very much. That’s helpful. And I mean, it’s - and as you think about new projects moving forward and some of the pipeline related work. I mean, do you think that based on what you know today, do you think that’s more weighted towards lodging beds or rental beds at this point?

Pipeline activity is what you’re asking?

Yes, really just broadly speaking out of all the opportunities that you see right now, I mean, where do you think those beds end up being weighted towards the lodging side or the rental side?

Most of our offerings at this point in time are for full turnkey, so it would be a combination what we are referring to as potential activity late in the year would involve both a rental component and an operated component, probably wrapped into a turnkey performance contract. And then, the alternate would be where we are seeing other types of activity around turnarounds et cetera, would be activity primarily in our existing open lodges or existing contracted lodges where we would occupancy rise. So those would be the two main categories, straight or bare rent on camp assets in terms of incremental pickup for us will be lighter than the turnkey based on how we’re going to market right now.

Okay. Thanks very. I appreciate all the detail. I’ll turn it back over.

Thanks, Ian.

Thank you. There are no further questions registered at this time. I would like to turn the meeting back over to you, Mr. Haynes.

Thank you very much. Thank you to everybody for listening in today. And look forward to catching up with you again soon. Thank you.

Thank you. The conference has now ended. Please disconnect your lines at this time. And we thank you for your participation.