- 20th consecutive quarter of year-over-year quarterly revenue
growth
- Sales outside North America and Europe grew 93%
year-over-year
- Recurring software services revenue up 25% year-over-year
Blackline Safety Corp. (TSX: BLN), a global leader in connected
safety technology, today reported record fiscal first quarter
financial results for the period ended January 31, 2022.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220316005428/en/
Management Commentary
“Blackline’s strong revenue growth during the quarter is further
evidence of the benefits from our ‘Invest to Grow’ strategy,” said
Cody Slater, CEO and Chair of Blackline Safety. “Our expanded sales
team continued to make strides, especially in our United States and
Rest of World (outside of North America and Europe) segments with
80% and 93% total revenue growth, respectively. While Europe’s
sales grew 51% year-over-year in the quarter, we expect the
region’s growth rates to accelerate in the remainder of fiscal
2022.
“Our customer net dollar retention(1) remained strong at 103% in
the quarter. Continuing growth in our software services revenue,
demonstrates the stickiness of our hardware-enabled
software-as-a-service (HeSaaS) business model. In fact, every $1
generated in G7 wearable sales translates to approximately $4 in
lifetime recurring service revenue, illustrating the attractiveness
and efficiency of our HeSaaS model.”
“While global supply chain constraints are presenting some
challenges and elevated costs in the near-term, I am proud of our
team’s success mitigating these challenges and delivering for our
customers, where we continue to see extremely healthy demand for
our products and services. We are adapting where we can to
recapture our hardware margins but, ultimately, this is a
short-term challenge that does not affect the higher margin
profitability of our multiyear service revenue from our customers.
In addition, we have successfully scaled our operations to
capitalize on our future growth opportunities in our current
industrial markets, as well as new types of workplaces as we
transform them through connected worker technology.”
Fiscal First Quarter 2022 Financial and Operational
Highlights
- 20th consecutive quarter of year-over-year quarterly revenue
growth
- Total revenue of $15.7 million, a 47% increase over the prior
year’s Q1
- Total revenue grew by 80% in the United States (“U.S.”), 51% in
Europe and 93% in Rest of World markets compared to the prior
year’s Q1
- Product revenue of $7.3 million, a 91% increase from the prior
year’s Q1
- Service revenue of $8.3 million, a 22% increase over the prior
year’s Q1, comprised of:
- Software services revenue of $7.4 million, a 25% increase from
the prior year’s Q1
- Operating lease revenue of $0.7 million, a 15% decrease from
the prior year’s Q1
- Rental revenue of $0.2 million, a 188% increase from the prior
year’s Q1
- Secured a $4.3 million contract with a new major U.S. energy
customer
- Presented connected worker innovations as a featured exhibitor
at ADIPEC Exhibition in Abu Dhabi
- Recognized on Deloitte’s Enterprise Fast 15 as the 9th fastest
growing enterprise company in Canada with 230% revenue growth over
the last three years
- Named as a preferred vendor for Shell plc. in a three-year
global framework agreement to supply connected worker solutions
enterprise-wide
- Closed previously announced agreement to open a facility in
Dubai, UAE in response to customer demand in the region
Annual Recurring Revenue(1) gains momentum, 11% sequential
improvement versus the prior quarter
Product sales through the last twelve months, along with robust
retention and renewal activity, fuelled an increase of 25% in
software services revenue during the first quarter for 2022
compared to the prior year quarter. Software services revenue grew
9% compared with the fourth quarter of 2021 due to increasing
deployments for significant contracts won in the second half of
FY2021. Total service revenue for the quarter was $8.3 million up
22% from $6.8 million in the prior year quarter. We exited the
first quarter with Annual Recurring Revenue(1) of $33.2 million,
representing 11% growth from the prior quarter.
Service gross margin percentage(1) remained strong at 68% in the
first quarter and in line with the prior year quarter. Product
gross margin percentage(1) was negatively impacted by ongoing
global supply chain challenges resulting in higher than normal
component costs and freight charges. Product margins were also
affected by lower unabsorbed material and labour costs and product
mix between the G7 and G7 EXO product lines.
At quarter end, Blackline had cash and short-term investments of
$45.0 million and no debt. The Company’s cash position enabled it
to invest in its manufacturing infrastructure and support the
working capital required to maintain flexibility in the face of
ongoing challenges in the global supply chain. During the quarter,
the Company expanded its production line capacity with $0.6 million
of Surface Mount Technology and manufacturing equipment brought
online. Additionally, the recent investment in Blackline Safety’s
rental fleet has allowed the Company to respond to early demand for
its full suite of connected devices where capacity has been
expanded to 1,500 hardware units since launching the program in
spring of 2021.
“We are excited to launch the first-of-its-kind G6 connected
personal safety device for the zero-maintenance market in July 2022
and the G5 in the light industry and construction market in early
fiscal 2023,” added Slater. “Both launches build on our success
with the G7 and G7 EXO and will extend Blackline’s competitive lead
with the most comprehensive connected safety suite of technologies
globally, including our Blackline Live portal for cloud-based
real-time reporting.
“Our team continually strives to innovate new ways to connect
all elements of the industrial worksite more broadly in order to
further enhance workplace safety and operational efficiency. Our
investment in sales and technology infrastructure over the past two
years has established the foundation to not only take the connected
G6 into the zero-maintenance market of over two million unconnected
devices, but also expand beyond gas detection and begin to connect
the broader industrial workplace. With the G5, we will be targeting
new areas where we currently have little to no penetration,
significantly increasing our total addressable market.”
Financial highlights
Three-months ended January
31
2022
2021
Change
CAD millions, except for percentage and
per share data
$
$
%
Revenue
15.7
10.7
47
Gross margin
6.4
5.6
15
Gross margin percentage(1)
41%
52%
(11)
Net loss
(12.9)
(4.9)
164
Loss per common share
(0.21)
(0.09)
133
EBITDA(1)
(11.4)
(3.9)
(196)
EBITDA per common share(1)
(0.19)
(0.07)
(171)
Adjusted EBITDA(1)
(6.4)
(0.4)
(1,674)
Adjusted EBITDA per common share(1)
(0.11)
(0.01)
(1,000)
(1)
This press release presents certain non-GAAP and supplementary
financial measures, as well as non-GAAP ratios to assist readers in
understanding the Company’s performance. Further details on these
measures and ratios are included in the “Non-GAAP and Supplementary
Financial Measures” section of this press release.
Key Financial Information
First quarter revenue was $15.7 million an increase of 47% from
$10.7 million in the comparable quarter of the prior fiscal year,
with the U.S. up 80% and Rest of World revenues up 93% being the
largest geographic growth regions quarter-over-quarter.
Service revenue during the first quarter was $8.3 million, an
increase of 22% compared to $6.8 million in the same quarter last
year. Retention rates of our existing customers across geographic
regions and industry sectors remained robust. Service revenue
increases within our existing customer base contributed $0.5
million during the quarter. There were also adverse effects of $0.3
million from customers who renewed fewer active devices after
experiencing workforce reductions during the last twelve months. In
addition, certain customers declined to renew their service plans
resulting in negligible reductions.
Service revenue for the quarter was positively impacted by the
strong growth of 188% in rental revenue compared to the prior year
quarter due to the application of the Company’s complete suite of
connected worker and area monitoring solutions in the industrial
turnaround and maintenance market. Product revenue during the first
quarter was $7.3 million, an increase of 91% compared to $3.8
million in the prior year quarter, as we saw the return to more
normal procurement processes, particularly in the U.S. and Rest of
World markets and continued sales of our new G7 EXO area gas
monitors during the quarter. The increase also reflects the
Company’s investment in its expanded sales network across North
America, the European Union and other geographies over the last
twelve months.
Overall gross margin percentage for the first quarter was 41%,
an 11% decrease compared to the prior year quarter driven by a
heavier product versus service mix. Service gross margin percentage
was 68% in the first quarter due to higher overall service volumes,
partially offset by higher carrier costs for the connectivity of
the Company’s devices as well as increases in personnel costs for
Safety Operations Centre team members and the product development
support team. Product gross margin percentage decreased to 10% from
21% in the prior year quarter due to higher material, supply and
freight costs resulting from global supply chain challenges.
Warranty and scrappage costs were also higher in the quarter.
Net loss and EBITDA were $12.9 million and ($11.4) million
respectively in the first quarter, driven by an 84% increase in
total expenses as the Company executed its ‘Invest to Grow’
strategy. The increase in the net loss for the quarter was
attributable to an increase in general and administrative, sales
and marketing expenses, and product research and development costs,
primarily as a result of higher salaries expense from additional
new hires.
Adjusted EBITDA was ($6.4) million for the first quarter
compared to ($0.4) million in the prior year quarter. The decline
in adjusted EBITDA in the quarter was primarily attributable to the
investments made to grow the business which resulted in an increase
in general and administrative and selling and marketing expenses
including higher salaries from additional team members.
Blackline’s interim condensed consolidated financial statements
and management’s discussion and analysis on financial condition and
results of operations for the three-months ended January 31, 2022
are available on SEDAR under the Company’s profile at
www.sedar.com. All results are reported in Canadian dollars.
Conference Call
A conference call and live webcast have been scheduled for 11:00
am ET on Wednesday, March 16, 2022. Participants should dial
1-800-319-4610 or +1-416-915-3239 at least 10 minutes prior to the
conference time. A live webcast will also be available at
https://www.gowebcasting.com/11756. Participants should join the
webcast at least 10 minutes prior to the conference time to
register and install any necessary software. If you cannot make the
call live, a replay will be available within 24 hours by dialing in
to either of the phone numbers above and entering replaying access
code 8635.
About Blackline Safety
Blackline Safety is a global connected safety leader that helps
to ensure every worker gets their job done and returns home safely
each day. Blackline provides wearable safety technology, personal
and area gas monitoring, cloud-connected software and data
analytics to meet demanding safety challenges and increase
productivity of organizations with coverage in more than 100
countries. Blackline Safety wearables provide a lifeline to tens of
thousands of men and women, having reported over 172 billion
data-points and initiated over five million emergency responses.
Armed with cellular and satellite connectivity, we ensure that help
is never too far away. For more information, visit
BlacklineSafety.com and connect with us on Facebook, Twitter,
LinkedIn and Instagram.
Non-GAAP and Supplementary Financial Measures
This press release presents certain non-GAAP and supplementary
financial measures, including key performance indicators used by
management typically used by our competitors in the
software-as-a-service industry, as well as non-GAAP ratios to
assist readers in understanding the Company’s performance. These
measures do not have any standardized meaning and therefore are
unlikely to be comparable to similar measures presented by other
issuers and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
GAAP.
Management uses these non-GAAP and supplementary financial
measures, as well as non-GAAP ratios and key performance indicators
to analyze and evaluate operating performance. Blackline also
believes the non-GAAP and supplementary financial measures defined
below are commonly used by the investment community for valuation
purposes, and are useful complementary measures of profitability,
and provide metrics useful in Blackline’s industry.
Throughout this news release, the following terms are used,
which do not have a standardized meaning under GAAP.
Key Performance Indicators
The Company recognizes service revenues ratably over the term of
the service period under the provisions of agreements with
customers. The terms of agreements, combined with high customer
retention rates, provides the Company with a significant degree of
visibility into near-term revenues. Management uses a number of
metrics, including the ones identified below, to measure the
Company’s performance and customer trends, which are used to
prepare financial plans and shape future strategy. Key performance
indicators may be calculated in a manner different than similar key
performance indicators used by other companies.
- “Net dollar retention” compares the aggregate service
revenue contractually committed for a full period under all
customer agreements of our total customer base as of the beginning
of each period to the total service revenue of the same group at
the end of the period. It includes the effect of our service
revenue that expand, renew, contract or attrit, but excludes the
total service revenue from new activations during the period.
- “Annual recurring revenue” is the total annualized value
of recurring service amounts (ultimately recognized as software
services revenue) of all service contracts at a point in time.
Annualized service amounts are determined solely by reference to
the underlying contracts, normalizing for the varying revenue
recognition treatments under IFRS 15. It excludes one-time fees,
such as for non-recurring professional services, and assumes that
customers will renew the contractual commitments on a periodic
basis as those commitments come up for renewal, unless such renewal
is known to be unlikely.
Non-GAAP Financial Measures
A non-GAAP financial measure: (a) depicts the historical or
expected future financial performance, financial position or cash
of the Company; (b) with respect to its composition, excludes an
amount that is included in, or includes an amount that is excluded
from, the composition of the most comparable financial measure
presented in the primary consolidated financial statements; (c) is
not presented in the primary financial statements of the Company;
and (d) is not a ratio.
Non-GAAP financial measures presented and discussed in this news
release are as follows:
“EBITDA” is useful to securities analysts, investors and
other interested parties in evaluating operating performance by
presenting the results of the Company on a basis which excludes the
impact of certain non-operational items. EBITDA refers to earnings
before interest expense, interest income, income taxes,
depreciation and amortization.
“Adjusted EBITDA” is useful to securities analysts,
investors and other interested parties in evaluating operating
performance by presenting the results of the Company on a basis
which excludes the impact of certain non-operational items, product
research and development costs related to new and existing
products, which enables the primary readers of the news release to
evaluate the results of the Company such that it was operating
without any expenditures in product research and development, and
certain non-cash and non-recurring items, such as stock
compensation expense, that the Company considers appropriate to
adjust given the irregular nature and relevance to comparable
companies. Adjusted EBITDA is calculated as earnings before
interest expense, interest income, income taxes, depreciation and
amortization, stock-based compensation expense, product development
costs and non-recurring impact transactions, if any. The Company
considers an item to be non-recurring when a similar revenue,
expense, loss or gain is not reasonably likely to occur within the
next two years or has not occurred during the prior two years.
Reconciliation of non-GAAP
financial measures
Three-months ended January
31,
CAD millions
2022
2021
Change
$
$
%
Net loss
(12.9)
(4.9)
164
Depreciation and amortization
1.6
1.1
37
Finance income, net
(0.1)
(0.1)
(9)
Income taxes
-
-
(100)
EBITDA
(11.4)
(3.9)
(196)
Product research and development
costs, net of depreciation, amortization and stock-based
compensation expense(1)
5.0
3.2
58
Stock-based compensation
expense(2)
-
0.3
(83)
Adjusted EBITDA
(6.4)
(0.4)
(1,674)
(1)
Product research and development costs exclude depreciation and
amortization, as well as stock-based compensation relating to
product research and development is excluded and adjusted in the
subsequent line as defined below.
(2)
Stock-based compensation expense relates to the Company’s stock
compensation plan and stock option expense extracted from cost of
sales, general and administrative expenses, sales and marketing
expenses and product research and development costs on the
consolidated statements of loss and comprehensive loss.
Non-GAAP Ratios
A non-GAAP ratio is a financial measure presented in the form of
a ratio, fraction, percentage or similar representation and that
has a non-GAAP financial measure as one or more of its
components.
Non-GAAP ratios presented and discussed in this news release is
follows:
“EBITDA per common share” is useful to securities
analysts, investors and other interested parties in evaluating
operating and financial performance. EBITDA per common share is
calculated on the same basis as net loss per common share,
utilizing the basic and diluted weighted average number of common
shares outstanding during the periods presented.
“Adjusted EBITDA per common share” is useful to
securities analysts, investors and other interested parties in
evaluating operating and financial performance. Adjusted EBITDA per
common share is calculated on the same basis as net income (loss)
per common share, utilizing the basic and diluted weighted average
number of common shares outstanding during the periods
presented.
Supplementary Financial Measures
A supplementary financial measure: (a) is, or is intended to be,
disclosed on a periodic basis to depict the historical or expected
future financial performance, financial position or cash flow of
the Company; (b) is not presented in the financial statements of
the Company; (c) is not a non-GAAP financial measure; and (d) is
not a non-GAAP ratio.
Supplementary financial measures presented and discussed in this
news release is as follows:
- “Gross margin percentage” represents gross margin as a
percentage of revenue
- “Product gross margin percentage” represents product
gross margin as a percentage of product revenue
- “Service gross margin percentage” represents service
gross margin as a percentage of service revenue
Note Regarding Forward-Looking Statements
This news release contains forward-looking statements and
forward-looking information (collectively "forward-looking
information") within the meaning of applicable securities laws
relating to, among other things, Blackline Safety's expectation to
realize potential from its intended investment in organic growth
opportunities in 2022, that Blackline intends to continue to
maintain capital flexibility to maintain its growth strategies and
investments in sales and marketing with an expanded sales network
and new digital lead generation capabilities, expectations with
respect to continuing to accelerate product commercialization,
including the launch of the first of its kind G6 connected personal
safety device for the zero-maintenance market in July 2022, as well
as the early fiscal 2023 initial product launch of the G5, the next
generation of Blackline Live for cloud-based real-time reporting,
Blackline’s ability to extend its competitive lead with the most
comprehensive connected safety suite of technologies in the world.
Blackline provided such forward-looking statements in reliance on
certain expectations and assumptions that it believes are
reasonable at the time, including expectations and assumptions
concerning business prospects and opportunities, customer demands,
the availability and cost of financing, labor and services, that
Blackline will pursue growth strategies and opportunities in the
manner described herein, and that it will have sufficient resources
and opportunities for the same, or that other strategies or
opportunities may be pursued in the future, and the impact of
increasing competition. Although Blackline believes that the
expectations and assumptions on which such forward-looking
information is based are reasonable, undue reliance should not be
placed on the forward-looking information because Blackline can
give no assurance that they will prove to be correct.
Forward-looking information addresses future events and conditions,
which by their very nature involve inherent risks and
uncertainties, including the risks discussed in Blackline's
Management's Discussion and Analysis and annual information form
for the year ended October 31, 2021 and available on SEDAR at
www.sedar.com. Blackline's actual results, performance or
achievement could differ materially from those expressed in, or
implied by, the forward-looking information and, accordingly, no
assurance can be given that any of the events anticipated by the
forward-looking information will transpire or occur, or if any of
them do so, what benefits Blackline will derive therefrom.
Management has included the above summary of assumptions and risks
related to forward-looking information provided in this press
release in order to provide readers with a more complete
perspective on Blackline's future operations and such information
may not be appropriate for other purposes. Readers are cautioned
that the foregoing lists of factors are not exhaustive. These
forward-looking statements are made as of the date of this press
release and Blackline disclaims any intent or obligation to update
publicly any forward-looking information, whether as a result of
new information, future events or results or otherwise, other than
as required by applicable securities laws.
(1) This news release presents certain non-GAAP and supplementary
financial measures, including key performance indicators used by
management and typically used by companies in the
software-as-a-service industry, as well as non-GAAP ratios to
assist readers in understanding the Company’s performance. Further
details on these measures and ratios are included in the “Key
Performance Indicators,” and “Non-GAAP and Supplementary Financial
Measures” sections of this news release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220316005428/en/
INVESTOR/ANALYST Cody Slater, CEO
cslater@blacklinesafety.com Telephone: +1 403 451 0327
MEDIA Christine Gillies, CMO cgillies@blacklinesafety.com
Telephone: +1 403 629 9434
Blackline Safety (TSX:BLN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Blackline Safety (TSX:BLN)
Historical Stock Chart
From Apr 2023 to Apr 2024