Randel Madell - IR Trevor Haynes - President, Chairman & CEO Toby Labrie - EVP & CFO Troy Cleland - EVP & COO Harry Klukas - EVP, International

Jon Morrison - CIBC World Markets

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 Third 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 Operating Officer, Troy Cleland; 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 third 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?

Thank you, Randel. At a consolidated level financial results for the company were soft, due primarily to the impact of continued low commodity prices. However, within our BOXX Modular platform specifically outside of Northern Alberta, we are seeing stability and measure growth as a result of the activity in construction, infrastructure and education. Workforce housing demand is a derivative of resource development, and is therefore highly correlated to commodity price. The extreme lows and WTI and natural gas early this year, have led to an extremely low level of activity, admittedly even lower than we had anticipated through the summer months. We note that near-term commodity price trends have shown a modest improvement, from the lows we experienced in early 2016 which we believe will lead to an increase in future field level activity. Some positive oil and gas industry indicators, such as rig count, capital market financing, capital budget increases, and hiring have begun to emerge. We anticipate some period of lag between capital allocation and large-scale projects progressing. At this point, it is still unclear exactly how long that lag will be before increasing activity results in meaningful increased demand for large format housing of remote labor in western Canada. Despite this lack of visibility, management remains cautiously optimistic, regarding opportunities currently being perceived in the marketplace. Through this uncertain period, the company continues to focus on managing its balance sheet through debt reduction, reducing administrative expenses, managing its cash through reduction and cause on cash and diversification outside of energy markets. Year-over-year this has resulted in reduction of net debt by 39% and reduction in administrative expenses by 21%. With an expected stabilization of end markets, we are increasing our focus on commercial positioning to ensure the Black Diamond capitalizes on new and emerging opportunities over the next several quarters. We believe that ongoing cost discipline and available liquidity provide us with optionality and sustainability. I will now turn the call over to Toby for the consolidated financial review. Toby?

Thanks, Trevor. Total adjusted EBITDA for the quarter was $5.7 million, down 70% or $13.5 million last year. 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 decreased by $9.7 million, primarily due to a decrease in average beds utilized and a decrease in revenue per available room or RevPAR. Decreased occupancy as a result of lower field level activity during the quarter was the main contributing factor to the decrease in RevPAR. While relatively little of the 73% year-over-year decline in RevPAR for lodging beds was attributable to price decreases were same with similar beds. The impact of the weak resource sector it on BOXX Modular was mitigated to a certain extent, while its exposure to other end-markets and geographies. BOXX Modular adjusted EBITDA decreased $1.2 million due to reduction in revenue from Northern Alberta, partially offset by rental revenue growth in Eastern Canada and the United States. While rental revenues from BOXX are relatively stable, non-rental revenue can be variable. Although these non-rental revenues were relatively low in 2016 to-date, we expect current bid logs, contracts and the delayed timing of major projects will result in strengthening non-rental revenues towards the end of the year. Energy Services adjusted EBITDA decreased by $3.2 million due to a decrease in utilization and rates related to the continued downturn in 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 administrative costs in the business units improved by $1 million due to headcount reductions, efficiency improvements, and cost containment initiatives. I will now review a few key consolidated financial metrics on the next slide. We recorded a net loss for the quarter of $7.9 million compared with a profit of $8 million in Q3 2015 due to lower operating revenues combined with a gain on sale of northern frontier being recognized in the comparative quarter. The payout ratio was 48% for the quarter compared with 52% year before due to reduction in dividends declared, partially offset by lower funds available for the dividends. Net debt-to-EBITDA for Q3 2016 was 2.42 compared with 1.82 in the comparative quarter due to a 70% decrease in EBITDA, partially offset by a 70.8 or 39% reduction in net debt from Q3 2015. I'll now turn the call back over to Trevor. Trevor?

Thanks, Toby. This graph shows the impact to our reductions in CapEx and dividends on cash flow for the past four quarters. Due to the low maintenance capital requirements of our rental fleets, and the availability of existing assets that we can deploy for new business; we were able to significantly reduce capital expenditures in the first half of the year. In the quarter, we did expand increased capital to accelerate the growth of BOXX Modular platform including the acquisition of the Shelter fleet in the Vancouver area and organic fleet expansions in Eastern Canada and our U.S operations. Our continued discipline in the third quarter allowed us to post positive operating cash flow, despite declining EBITDA. This slide does not take into account changes in working capital which were net positive and allowed us to pay down $2 million of debt in the quarter in addition to the $25.6 million net proceeds of the equity financing completed in July. We exited the quarter with $10.7 million in capital expenditures year-to-date and $3.5 million in capital commitments against our -- remaining against our $15 million 2016 capital program. Subsequent to the quarter, we closed the acquisition of MPA Systems for $3.1 million which was incremental to our $15 million 2016 capital program. We also announced yesterday of the approval of our 2017 capital plan in the amount of $20 million, this plan will primarily support growth capital requirements for the BOXX Modular space rentals business outside of Alberta which benefits from broad exposure to multiple industry segments, and continues to grow our base of stable cash flows from a diversity of products industries and geographies. In 2016 we have successfully expanded our BOXX Modular platform into healthy markets, and recently has been executing on tucking acquisition to quickly scale existing operations. The acquisition of the Shelter Modular fleet provided the base to scale our new Vancouver branch. Our acquisition of MPA provides both assets to our fleet and a new revenue stream disaster recovery contracts which provides diversity and stability with a relatively low capital demand. In both of these acquisitions, there was minimal incremental SG&A assumed and they both support the overarching strategy of scaling and diversifying the Black Diamond platform. The further growth of BOXX Modular will provide balance to our business against our more volatile commodity focused platforms. Black Diamond remains well positioned to accelerate into recovering market. We have a high degree of optionality and a strong base of long live assets that provide significant operating leverage to our current business. Operator, we are ready for questions.

Certainly, thank you. We will now take questions from the telephone lines. [Operator Instructions] There are no questions registered at this time. I would like to turn the meeting back over to the Ms. Madell. I apologize, but we do now have a question. It's from Jon Morrison with CIBC World Markets. Please go ahead.

Morning all. Can you talk about the line of sight for Sunday Creek in the coming year? And would you expect utilization in 2017 to be materially different than where it sits today?

As we said in past I think, blind site [ph] is pretty difficult in this market. Having said that obviously what we've touched on in the quarter and through the summers that our operating camps have suffered from quite low utilization, so our occupancies are -- so the -- there is upside there where we're -- we're at quite low levels through the summer of 2016. So we do see some potential activity and are having discussions with various customers in the area who seems to be demanding in the area for bids, so we remain optimistic but we tend to see improvement from where we sit today.

Is it fair to assume that you're not thinking about dismantling or scaling back that camp, but ultimately just waiting for the market to turn a bit at this point?

Yes, that camp we think remains well positioned where it sits. As I mentioned there is number of operators in the area where the demand for beds potentially in the short-term but also in the longer term makes sense and we've we feel that asset continues to be well positioned.

Lodging per revenue day came down a bit quarter-over-quarter, is it fair to assume that was largely utilization based and pricing is probably troughed at this point, and probably has more momentum on a go-forward basis than downside at this stage?

Yes, definitely, on the RevPAR for operated beds, especially the pricing has largely been just due to occupancy levels where RevPAR is a big factor of both, occupancy and price, but the major moves that we've been seeing have been on the occupancy front and not as much on the pricing front.

So if you would pull the occupancy side of the RevPAR number, it's been flat for probably six or nine months, that's a fair characterization?

For the last six months it's been close to flat, yes.

Okay. On the international side I realized that you guys signed a five-year contract in April and that gives you a certain base level of business in Australia. Can you give any sense of other bidding activities in that market at this stage?

I'd be happy to, this is Harry Klukas. The Australian market is somewhat fragmented, if you look at the resource sector, certainly it's still depressed but there are some encouraging signs as we've seen the price of coal and iron ore stabilize but that hasn't translated into major projects where we're seeing the opportunities our infrastructure driven primarily, our operation in Sydney is enjoying increased utilization, the rates are still quite low by historical standards, but seem to have stabilized. The education sector has proven to be a good opportunity for us, it's quite a significant demand, associated classrooms in that market primarily in the eastern major suburbs. So it has been in terms of bid activity to answer your question, improving the last two to three months.

Okay, perfect. As you look at opportunities within BOXX, is the valuation that you paid for Shelter and MPA fairly indicative of where the space rentals market is pricing from an M&A perspective at this stage or do you view those to be fairly unique opportunities and that they were smaller scale?

I think -- it's Troy, here. I think that the valuations that we came to an agreement on were fair and a realistic expectation. We like both the market areas that the opportunity presented itself and we'll continue to look for other opportunities in that same magnitude.

When you think about new geographies, probably largely more so in the U.S. for instance, do you believe that you need to buy a small business and team to grow in those markets or you believe you can actively bid on an organic basis and -- even though your name may not be known -- well-known in those markets, it's not a disadvantage to you at all?

I think the answer is probably both, we've always liked the organic growth process but the problem with organic is the speed, and how quickly you can get to scale. Acquisition opportunities present that opportunity to get to scale quicker, and so that's where we'll be looking at both areas as we look to grow -- go into other geographic areas.

Last one just for me; can you share how much of the 2017 CapEx programs actually earmarked for specific projects at this point?

Jon, it's relatively little at this point. Most of our committed capital spends at point -- we've announced just over $3 million committed at this point, most of that is earmarked for 2016 but some of that remains for example part of the Shelter commitment which -- some of that would lead into 2017 but mostly $20 million is yet to be committed.

Appreciate the color, I'll turn it back.

Thank you. [Operator Instructions] There are no further questions registered at this time. And I would like to turn the meeting over to Ms. Madell.

Thank you for participating in our third quarter conference call and webcast today. We look forward to speaking with you on our next quarter.

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