Recurring service revenue jumps $1M over Q1 FY 2020
Blackline Safety Corp. (TSX.V: BLN), a global leader in gas
detection and connected safety solutions, announced $8.5M record
revenue for the quarter ended April 30, 2020. Total revenue grew to
$8.5M with recurring service revenue increasing 58% to $6.6M from
$4.2M in the prior year quarter. These results were achieved
despite the quarterly impact of the emergence of COVID-19, declared
as a global pandemic by the World Health Organization on March 11,
2020.
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Blackline Safety Q2 FY2020 infographic
(Graphic: Business Wire)
“There’s no question that a major theme for most businesses in
2020 is COVID-19 and the impact of the global pandemic on the
world. During the quarter, coronavirus reduced Blackline’s growth
rate as sales of new products were deferred by most prospective
customers as they reacted to the pandemic,” said Cody Slater, CEO
and Chairman at Blackline Safety. “Despite the impact on our
hardware sales, the strength of Blackline’s offering was clear
during this time as organizations around the world continued to
rely on our connected services to keep their people safe. In fact,
total field usage hours of our G7 wearables dipped less than 10%
compared to pre-pandemic levels. The vast majority of our customers
are essential businesses that span industrial sectors including
manufacturing, public works and utilities. Blackline supported
their continued operations during the pandemic, helping to keep
their people safe wherever they work and whatever the
challenge.”
“While hardware sales were limited by social distancing
restrictions, the company saw the largest ever quarter-on-quarter
revenue growth in its recurring service revenues, jumping from $5.6
to $6.6 million. This increase was driven by the deployment of
product purchased in prior quarters and our strong retention rate,
highlighting the value of Blackline’s recurring service business
model in these times of uncertainty.”
Blackline closed the quarter with a strong working capital
position, including cash and short-term investments of $22.9M.
Blackline’s overall gross margin was 55%, an 11% increase over the
prior year quarter with service margin improving to 71% from 65%
due to growth of Blackline’s recurring service revenue. Blackline
achieved its sixth successive quarter of positive Adjusted EBITDA,
a non-GAAP metric that management believes is valuable for
investors to use to track corporate performance.
During the quarter, Blackline developed and launched its
industrial contact tracing technology to help businesses assess and
manage their social distancing and self-isolation programs.
Blackline’s new Close Contact report and other tools leverage its
off-the-shelf and intrinsically safe G7 cloud-connected wearables
that stream location-enabled data to the Blackline Safety Cloud.
This new capability was released to Blackline customers at no
additional cost, supporting contact tracing investigations. A suite
of online reports provides businesses with an interactive map of
close interactions while highlighting the individuals who had close
proximity to an individual with symptoms or tested positive for
COVID-19. One of a dozen interactive Blackline Analytics reports,
the new Close Contact report has become one of the most used by
Blackline clients to date.
Since the close of Q2 FY2020, many regions around the world have
begun a phased return-to-work program. As markets open up,
Blackline has begun to see the reopening of sales opportunities
that were deferred during pandemic lockdown.
Second quarter highlights
- Thirteenth consecutive quarter of year-over-year revenue
growth
- Sixth consecutive quarter of positive Adjusted EBITDA
- Total revenue of $8.5M, a 3% increase over the prior year’s
Q2
- Recurring service revenue of $6.6M, a 58% increase over the
prior year’s Q2
- Product revenue of $1.9M, a 53% decrease over the prior year’s
Q2
- Total revenue grew by 27% in the United States over the prior
year’s Q2
- Overall gross margin percentage was 55%, an 11% increase over
the percentage achieved in the prior year’s Q2
- Overall gross margin percentage was comprised of product and
service margin percentages of 1% and 71%, compared to 22% and 65%
in the prior year’s Q2
- Contracted future service revenue (Blackline Complete 3-year
lease commitments) was $6.3M at April 30, 2020
- Total cash and short-term investments of $22.9M at April 30,
2020
- Continued development of Blackline’s new G7 EXO area gas
monitor product line for launch in Q4 FY2020
Financial Highlights
The subsequent values in this release are in thousands, except
for percentages and per share data.
Quarter Ended April 30
Six-Months Ended April 30
2020
2019
Change
2020
2019
Change
Revenue
$8,472
$8,189
3%
$17,390
$14,418
21%
Gross Margin
$4,658
$3,570
30%
$8,717
$6,412
36%
Gross Margin Percentage
55%
44%
11%
50%
44%
6%
Net Loss
($2,099)
($3,016)
30%
(4,454)
($4,761)
6%
Net Loss per Share
($0.04)
($0.06)
($0.09)
($0.10)
Net Loss excluding stock-based
compensation expense
($1,272)
($1,848)
31%
($3,533)
($3,466)
(2%)
Adjusted EBITDA
$1,397
$253
452%
$1,918
$286
571%
Adjusted EBITDA per Share
$0.03
$0.01
$0.04
$0.01
Key Financial Information
Second quarter revenue was $8,472, an increase of 3% from $8,189
in the comparable quarter of the prior fiscal year with revenue
growth of 27% in the United States quarter-over-quarter.
Service revenue was $6,564, an increase of 58% compared to
$4,165 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 second quarter was $1,908, a decrease
of 53% compared to $4,024 in the same period last year. The
decrease here was an effect of the impact of COVID-19 on the
ability for the company to generate new sales during the lockdown
periods. An additional impact of the pandemic was the inclusion of
a credit of $313 as a large UK customer reduced their planned
deployment due to COVID-19.
Gross margin percentage for the second quarter was 55%, which
was an 11% increase to that achieved in the comparable quarter of
the prior year, with the service revenue margin improving to 71%
from 65% driven by the growth of Blackline’s service revenue
quarter-over-quarter.
Adjusted EBITDA was $1,397 for the second quarter compared to
$253 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 reduced 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 April 30,
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/20200625005109/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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