Blackline Safety offers flexible buying options to customers—they can purchase, lease or rent—to enhance the competitiveness of its offering. Customers can purchase equipment as a capital expense, lease as an operational expense, or rent for short-term projects like facility shutdowns and turnarounds to fit any budget. The lease option has been popular with Blackline’s customers and with the establishment of the Securitization Program, the Company can elect to sell its lease receivables to CWB Maxium within 30 days of signing a new customer contract.
The Securitization Program with CWB Maxium will have a renewable one-year term and replaces Blackline’s requirement to fully finance its customer lease obligations, with a new purchase facility based on lease purchases of up to $15 million (CAD) and $35 million (USD) for its safety wearables and area gas monitoring equipment. The new purchase facility is expected to provide the Company increased financial flexibility and improved liquidity as management continues to execute its strategic plan and goal of sustained positive Adjusted EBITDA exiting fiscal 2023.
“Our new purchase facility agreement with CWB Maxium is transformational to our business. This facility will enhance the cash flow profile of Blackline’s leasing program enabling us to more actively promote leasing as an attractive alternative to customers deploying leading edge connected safety technology,” said Cody Slater, CEO and Chair of Blackline Safety.
“Combined with our solid cash position of $23.5 million at the end of our fiscal first quarter, this new facility significantly bolsters our financial flexibility and provides us with immediate, non-dilutive liquidity while lowering our overall cost of capital and broadening our banking relationships. We are excited to be partnering with a Canadian financial institution that shares our entrepreneurial spirit and desire to see Canadian businesses succeed on the global stage. We have increased confidence in our ability to fund the Company through our transition to generating free cash flow and profitability as we exit fiscal 2023.”
"We are proud to be associated with Blackline, a company dedicated to the safety and success of their customers" said Daryl MacLellan, President and CEO of CWB Maxium. “They continue to bring innovative products to market, and we look forward to supporting their future growth”.
The purchase facility is subject to various conditions including both financial and performance covenants. The option to renew on an annual basis is subject to approval by CWB Maxium, under their sole discretion, with a 60-day notice period.
Echelon Capital Markets acted as the exclusive financial advisor in the arrangement of the Securitization Program.
About Blackline Safety
Blackline Safety is a technology leader driving innovation in the industrial workforce through IoT (Internet of Things). With connected safety devices and predictive analytics, Blackline enables companies to drive towards zero safety incidents and improved operational performance. Blackline provides wearable devices, personal and area gas monitoring, cloud-connected software and data analytics to meet demanding safety challenges and enhance overall productivity for organizations with coverage in more than 100 countries. Armed with cellular and satellite connectivity, Blackline provides a lifeline to tens of thousands of people, having reported over 200 billion data-points and initiated over seven million emergency responses. For more information, visit BlacklineSafety.com and connect with us on Facebook, Twitter, LinkedIn and Instagram.
About CWB Maxium
Specializing in mid-market lending since 1993, CWB Maxium Financial, Inc. is a lender that provides creative financing solutions to businesses across Canada. As part of the CWB Financial Group of companies, we have robust funding capabilities and access to capital, allowing us to help more customers in more ways. Our straightforward decision-making process and open communication make it easy for you to know where you stand every step of the way.
INVESTOR AND ANALYST CONTACTS:
Shane Grennan, CFO
Telephone: +1 403 630 8400
Christine Gillies, CPMO
Telephone: +1 403 629 9434
Note Regarding Forward-Looking Statements
This press release contains certain forward–looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, this press release contains statements concerning the anticipated terms of the purchase facility, that the new facility is expected to provide the Company increased financial flexibility and improved liquidity as management executes its strategic plan and goal of sustained positive Adjusted EBITDA exiting fiscal 2023; the potential benefits thereof including that it is expected to enable the Company to more actively promote leasing as an attractive alternative to customers deploying Blackline’s connected safety technology without impacting its balance sheet; the Company's expectation that it will transition to generating sustained profitability and free cash flow as it exits fiscal 2023. Although Blackline believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Blackline can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The amount of customers that choose Blackline's leasing program may change, that the terms of any leases may not qualify for funding under the new facility; Blackline's compliance with the terms of the new facility and its senior secured facility; defaults under the new facility or the Company's senior credit facility. The forward looking statements contained in this press release are made as of the date hereof and Blackline undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.