$9.4M quarterly revenue driven by 44% jump in
recurring service revenue
Blackline Safety Corp. (TSX.V: BLN), a global leader in gas
detection and connected safety solutions, announced record third
quarter revenue of $9.4M for the quarter ended July 31, 2020. The
growth in total revenue was a result of recurring service revenue
increasing 44% to $6.7M from $4.6M in the prior year quarter.
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Blackline Safety Q3 FY2020 infographic
(Photo: Business Wire)
“During the continuing COVID-19 global pandemic, the world is
balancing the needs of ensuring the safety of our employees and
communities with the need to keep our economies flowing,” said Cody
Slater, CEO and Chairman at Blackline Safety. “Despite the ongoing
challenges with new product sales due to the Coronavirus, we are
pleased to see Blackline returning to double-digit growth during
our third quarter with strong recurring service and renewals.
Blackline also achieved its first quarter of positive cash flow in
part due to continued sales of G7 cloud-connected wearables,
proactive cash and receivables management and support from the
Canada Emergency Wage Subsidy program. These results affirm the
strength of our recurring service business model and core value for
clients around the world during these difficult times. As customers
return to more normal buying patterns, coupled with product line
expansion through G7 EXO, we see the opportunity for expanded deal
movement increasing through the upcoming quarters.”
Blackline closed the quarter with a strong working capital
position with cash and short-term investments of $23.2M, up from
$22.9M in Q2. Overall gross margin was 53%, a 4% increase over the
prior year quarter with service margin improving to 69% from 66%
due to growth of Blackline’s recurring service revenue. Blackline
achieved its seventh successive quarter of positive Adjusted
EBITDA, and the fifth successive quarter of improvement in this
non-GAAP metric, which management believes is valuable for
investors to use to track corporate performance.
During the quarter, Blackline worked to complete the product
development efforts of its upcoming G7 EXO area gas monitor, the
first of its kind, that features integrated 4G cellular
direct-to-cloud communication. G7 EXO recently received its ATEX
and IECEx intrinsic safety certifications and shipments have
begun.
Third quarter highlights
- Fourteenth consecutive quarter of year-over-year revenue
growth
- Seventh consecutive quarter of positive Adjusted EBITDA
- Total revenue of $9.4M, a 16% increase over the prior year’s
Q3
- Recurring service revenue of $6.7M, a 44% increase over the
prior year’s Q3
- Product revenue of $2.8M, a 20% decrease over the prior year’s
Q3
- Total revenue grew by 41% in Canada and 18% in Europe over the
prior year’s Q3
- Overall gross margin percentage was 53%, a 4% increase over the
percentage achieved in the prior year’s Q3
- Total cash and short-term investments of $23.2M at July 31,
2020 with positive net cash flow in Q3
- Continued development of Blackline’s new G7 EXO area gas
monitor product line for launch in Q4 FY2020
Post-quarter highlights
- Blackline closed a bought deal financing for gross proceeds of
$36M
- G7 EXO receives certification and shipments begin
- OH&S New Product of the Year award in the category of
Internet of Things for the new Blackline Vision Close Contact
report
- OH&S New Product of the Year award in the category of
Industrial Hygiene – Gas Monitors for G7 wearables equipped with
the MPS Flammable Gas Sensor
Financial highlights
The subsequent values in this release are in thousands, except
for percentages and per share data.
Quarter Ended July 31
Nine-Months Ended July 31
2020
2019
Change
2020
2019
Change
Revenue
$9,437
$8,108
16%
$26,827
$22,525
19%
Gross Margin
$4,961
$3,991
24%
$13,678
$10,403
31%
Gross Margin Percentage
53%
49%
4%
51%
46%
5%
Net Loss
($1,762)
($2,240)
21%
($6,217)
($7,001)
11%
Net Loss per Share
($0.04)
($0.05)
($0.13)
($0.15)
Net Loss excluding stock- based
compensation expense
($1,575)
($2,103)
25%
($5,109)
($5,569)
8%
Adjusted EBITDA
$1,420
$112
1,168%
$3,337
$398
738%
Adjusted EBITDA per Share
$0.03
$0.00
$0.07
$0.01
Key Financial Information
Third quarter revenue was $9,437, an increase of 16% from $8,108
in the comparable quarter of the prior fiscal year with revenue
growth of 41% in Canada and 18% in Europe quarter-over-quarter.
Service revenue was $6,665, an increase of 44% compared to
$4,639 in the same period last year. This growth was primarily
driven by service revenue generated by increased adoption
throughout international and diversified industrial markets of
Blackline’s connected safety devices and strong device
renewals.
Product revenue during the third quarter was $2,772, a decrease
of 20% compared to $3,469 in the same period last year. The
decrease was due to the continuing impact of COVID-19 on the
ability for the company to generate new sales during these
periods.
Gross margin percentage for the third quarter was 53%, which was
a 4% increase to that achieved in the comparable quarter of the
prior year, with the service revenue margin improving to 69% from
66% driven by the growth of Blackline’s service revenue
quarter-over-quarter.
Adjusted EBITDA was $1,420 for the third quarter compared to
$112 in the comparable quarter of the prior year. The increase in
the Adjusted EBITDA for the quarter was attributable to increased
revenues and gross margin and decreased selling and marketing
expenses, offset by increased general and administrative expenses
quarter-over-quarter.
Blackline’s unaudited condensed consolidated interim financial
statements and management’s discussion and analysis on financial
condition and results of operations for the period ended July 31,
2020 (including the reconciliation of non-GAAP measures) are
available at www.sedar.com. All results are reported in Canadian
dollars.
About Blackline Safety: Blackline Safety is a global
connected safety leader that helps to ensure every worker gets
their job done and returns home safe 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 in
more than 100 countries. Blackline Safety wearables provide a
lifeline to tens of thousands of men and women, having reported
over 120 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.
Note Regarding Forward-Looking Statements
This press 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 2020, Blackline's intention to expand its product
offerings to total workplace connectivity and management's
expectation that Blackline will continue to focus on its
comprehensive approach to connected devices, live monitoring,
consulting and integration services. 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 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.
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.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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version on businesswire.com: https://www.businesswire.com/news/home/20200924005177/en/
INVESTOR/ANALYST CONTACT Cody Slater, CEO
cslater@blacklinesafety.com Telephone: +1 403 451 0327 MEDIA
CONTACT Heather Houston hhouston@daltonagency.com Telephone: +1
904 398 5222 Cell phone: +1 386 216 9472
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