Blackline Safety shifts to service-based model, ends 2016 with $8M revenue and 43% growth in recurring service
January 27, 2017
To meet global customer needs, Blackline's connected safety technology is expanding with gas detection in Q2
CALGARY, ALBERTA--(Marketwired - Jan. 27, 2017) - Blackline Safety Corp. (TSX VENTURE:BLN) ("Blackline"), a leading manufacturer of connected worker safety monitoring solutions announced results for its year ended October 31, 2016.
"The 43% growth in our service subscription revenue - plus $1.9M in contracted future service revenue - is from customers embracing our comprehensive leasing program, and demonstrates the success of our transition to a service-dominant business model," says Cody Slater, CEO and Chairman at Blackline Safety. "Despite certification delays for a core product, Loner M6i, and a soft energy sector, we still achieved tangible revenue growth while developing new capabilities for personal gas detection." He added, "Continuing to respond to global customer needs, Blackline expects to complete the approvals process during the second quarter of this fiscal year and begin selling G7 products to customers who have pre-ordered."
- Total annual revenue of $8.0M, a 10% increase over the prior year
- Service annual revenue of $5.9M, a 43% increase over the $4.1M in the prior year
- Annual gross margin of $3.8M, a 13% increase over the prior year
- Contracted future service revenue at $1.9M, a $1.4M increase over the prior year
- Development of environmental gas detection capability
Key Financial Information
Values in this release are in thousands, except for percentages and per share data
Annual revenue for fiscal 2016 was $8,001 compared to $7,268 in the prior year, resulting in an increase of 10% or $733. Service revenue was $5,847, an increase of 43% compared to $4,080 in the year prior. These increases were driven by customers adopting Blackline's Loner Complete leasing program that eliminates up-front capital costs and provides customers with a comprehensive product for a monthly fee during a three-year term.
Contracted future service revenue, representing future lease revenue commitments from the Loner Complete program, was $1,854 as at October 31, 2016 from $423 at the prior year end.
Gross margin for the year was $3,848 compared to $3,405 year-over-year, resulting in an annual gross margin of 48% in fiscal 2016 compared to 47% in the prior year-the increase being attributable to the shift in revenue to a service-dominant business model.
Adjusted EBITDA was $(1,371) for the year ended October 31, 2016 compared to $(641) in the prior year. The decrease in Adjusted EBITDA for the year can be attributed to an increase in selling, general and administrative expenses offset by an overall increase in gross margin.
Blackline's audited consolidated financial statements and management's discussion and analysis on financial condition and results of operations for the year ended October 31, 2016 are available at www.sedar.com. All results are reported in Canadian dollars. To learn more about Blackline Safety, visit www.blacklinesafety.com and follow Blackline on Twitter @blacklinesafety.
|Year Ended October 31|
|Gross Margin Percentage||48||%||47||%||2||%|
|Loss per Share||($0.26||)||($0.18||)|
Blackline announced G7, the first connected safety system to comprehensively help businesses protect personnel from gas leaks, quickly respond to injuries and health events and actively evacuate facilities in record time while accounting everyone's safety along the way. G7 will enable employees to work nearly anywhere with 3G and satellite wireless options while not relying on plant or vehicle Wi-Fi communications or ad hoc networking with other devices.
When purchasing G7, customers will choose 3G wireless or satellite connectivity and select a cartridge with one, two, three or four gas sensors. Current gas sensor options include combustible gases, hydrogen sulfide, carbon dioxide, carbon monoxide and oxygen. Each cartridge is pre-calibrated and field-replaceable, ensuring the customer's maximum uptime of gas detection equipment. Blackline will expand G7 capability over time through introduction of new gas sensors and additional cartridges, helping to future-proof a customer's safety program investment.
While G7 increases the level of safety by connecting employees to live monitoring personnel, it will also deliver cost-savings to employers. Customers no longer need to purchase gas detection equipment-Blackline has incorporated field-replaceable cartridges into all purchased G7 service plans. Blackline's optional leasing program provides an alternative for clients, removing upfront equipment and service costs, replacing them with a three-year operational lease with included gas detection capability.
Ensuring the ongoing compliance of gas detection equipment can be a challenge for businesses. Traditionally, regular gas sensor test and calibration logs are manually retrieved from docking stations in the field. Data retrieval and review to ensure compliance can be time-consuming, presenting a hidden cost for businesses. G7 streamlines this process, communicating all test data to the client's monitoring account in real-time. Automatic compliance reporting provides customers with simple green-yellow-red metrics, confirming compliance, warning of approaching due dates and alerting when anything is out of compliance.
Blackline demonstrated G7 at several trade events in the United States, Canada, the United Kingdom, Europe and the Middle East. G7 shipments are expected to begin in Q2 FY2017, pending certification processes.
About Blackline: Blackline Safety is a global connected safety technology leader. We help businesses respond to emergencies in real-time and manage efficient evacuations, accounting for everyone's safety along the way. Behind each of our groundbreaking innovations is a strong team of designers and engineers with millions invested in technology research and development. We are agile and capable, developing and manufacturing everything in-house - from wearable technology and personal gas detection to cloud-hosted infrastructure and web-based interfaces. With service in over 200 countries, we are the only provider of industrial-grade, turn-key, work-anywhere connected safety monitoring solutions. We make it easy and seamless to meet the most demanding safety monitoring challenges of organizations in any industry. Alert. Locate. Respond.™ For more information, visit www.BlacklineSafety.com.
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