Calgary, Canada — January 24, 2023 — Blackline Safety Corp. ("Blackline" or the "Company") (TSX: BLN), a global leader in connected safety technology, today reported record fiscal fourth quarter financial results for the period ended October 31, 2022.
Comentário da Administração
“Our results in Q4 reflect a perpetual theme for Blackline as we were able to grow our top-line for the 23rd consecutive quarter as we continue taking share from competitors with our industry-leading connected safety solutions,” said Cody Slater, CEO and Chair of Blackline Safety. “Equally important, we executed on our cost reduction goal of delivering Q4 total expenses that were at or below Q2 levels of $21.5 million, representing a $4 million reduction from Q3 levels. Looking ahead, we expect to deliver continued revenue growth, coupled with disciplined cost management, which is expected to allow Blackline to exit fiscal 2023 in a position of sustained positive Adjusted EBITDA.
"We concluded fiscal 2022 with revenue growth of 34% compared to fiscal 2021, as Q4 growth was solid at 14%, driven by robust performance from our service side that recorded 33% growth. The outsized service growth also drove our annual recurring revenue(1) 35% higher year-over-year to $36.6 million. Regionally, we saw continued strong performance from Rest of World and Canada, with 105% and 79% growth, respectively. We also are re-establishing momentum in Europe with 13% growth in the quarter and see that region returning to be a solid contributor to our growth trajectory.
“In regards to gross margins, we remain very encouraged with our performance and outlook. Service margins remained strong at 70%, while our product margins increased to 26%, our strongest quarter in fiscal 2022. It is worth noting that our gross margin performance in Q4 received negligible benefit from the 15% pricing increase we recently implemented. We expect to realize this meaningful improvement in product margins in fiscal 2023 and we also see the potential to generate additional product margin enhancement through product redesigns as we incorporate learnings from the G6 into our suite of connected safety solutions. These tailwinds support our view that product and service margins can approach 40% and 75%, respectively, by the end of fiscal 2023.
“We also recently launched our latest product innovation, the G6, with initial shipments to North America and Europe occurring shortly after the start of our fiscal 2023. We believe the product-market fit for the G6 is strong and with our track record of developing innovative solutions in the industrial worker market, we remain excited about the potential the G6 has to disrupt and capture share in the $220 million annual zero-maintenance gas detection market.
“Lastly, we closed two important financings during the quarter to strengthen our financial and liquidity position. We successfully closed a nearly $25 million equity financing, with solid participation from existing investors and insiders and closed on a new $15 million senior secured operating facility. We ended the quarter in a strong financial position with total cash and short-term investments on hand of $31.1 million and are actively assessing multiple financial structures for our finance lease portfolio, which had an undiscounted value of nearly $36 million at the end of the quarter, to supplement our liquidity position as we execute on our path to sustained profitability.”
Fiscal Fourth Quarter 2022 and Recent Financial and Operational Highlights
(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.
Destaques financeiros
Informações financeiras importantes
Fiscal fourth quarter revenue was $22.0 million, an increase of 14% from $19.3 million in the prior year quarter, with Canada up 79%, Europe up 13%, and Rest of World up 105% being the largest geographic growth regions year-over-year. United States declined 17% from the prior year quarter due to the impact in the prior year quarter from receipt of the largest single order the Company has received.
Service revenue during the fiscal fourth quarter was $10.9 million, an increase of 33% compared to $8.2 million in the prior year quarter. Software services revenue increased 35% to $9.2 million, operating lease revenue decreased 11% to $0.7 million and rental revenue increased 70% to $1.1 million. Software services growth was attributable to new activations of devices sold over the past 12 months. Rental revenue growth continues to be strong as a result of the demand for the Company’s complete suite of connected solutions in the industrial turnaround and maintenance market.
Product revenue during the fiscal fourth quarter was $11.1 million, largely unchanged compared to the prior year quarter. Prior year Q4 hardware sales benefited from the largest sale in Blackline’s history, to a US customer. Finance lease revenue growth of $1.7 million vs the prior year quarter continued to demonstrate the attractiveness of this option for many of our customers.
Overall gross margin percentage for the fiscal fourth quarter was 48%, a 1% increase compared to the prior year quarter. The increase in total gross margin percentage is due to a favourable shift in sales mix with service revenue comprising 49% of total revenue in the fourth quarter, an increase of 7% from the prior year quarter. Product revenue comprised 51% of total revenue in the fourth quarter, a decrease of 7% from the prior year quarter. Service gross margin percentage increased to 70% compared to the prior year quarter at 69% as service revenue continued to grow, absorbing more fixed cost of sales.
Product gross margin percentage decreased to 26% from 30% in the prior year quarter due to G7 EXO contributing a greater proportion of sales in the prior year period as well as inflationary pressures on the costs of certain components in the Company’s devices.
Net loss was $9.9 million, in the fiscal fourth quarter, compared to $9.6 million in the prior year quarter. Net loss increased primarily due to increases to general and administrative expenses, sales and marketing expenses and product research and development costs in the first three quarters of fiscal 2022.
Adjusted EBITDA was ($7.7) million for the fiscal fourth quarter compared to ($7.7) million in the prior year quarter. Note the Company updated its definition of Adjusted EBITDA during the fiscal fourth quarter, to remove the adjustment of product research and development costs and include an adjustment for foreign exchange gains and losses. The comparative period has also been adjusted for this change and is presented on the same basis. This update reflects management’s focus on Adjusted EBITDA profitability as a key performance indicator and to improve comparability to peers.
At quarter end, Blackline had total cash and short-term investments on hand of $31.1 million and $6.4 million of availability on its new senior secured operating facility. The decrease in cash and short-term investments is mainly due to operating losses including the Company’s investment in the G6 product line launching during the fourth quarter of the fiscal year. At quarter end, the Company had $8.6 million of borrowings on its new senior secured operating facility, which was utilized to cover working capital needs of the business.
Blackline’s Annual Condensed Consolidated Financial Statements and Management’s Discussion and Analysis on Financial Condition and Results of Operations for the three months and full-year ended October 31, 2022 are available on SEDAR under the Company’s profile at www.sedar.com. All results are reported in Canadian dollars.
Teleconferência
A conference call and live webcast have been scheduled for 11:00 am ET on Tuesday, January 24, 2023. 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/12419. 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 dialing 1-800-319-6413 and entering access code 9756.
Sobre a 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 187 billion data-points and initiated over five million emergency responses. For more information, visit BlacklineSafety.com and connect with us on Facebook, Twitter, LinkedIn and Instagram.
CONTATOS PARA INVESTIDORES E ANALISTAS:
Matt Glover ou Jeff Grampp, CFA
Telefone: +1 949 574 3860
CONTATO COM A MÍDIA
Christine Gillies, CMO
cgillies@blacklinesafety.com
Telefone: +1 403 629 9434
Medidas financeiras não GAAP e suplementares
Este comunicado à imprensa apresenta certas medidas financeiras não GAAP e suplementares, incluindo indicadores-chave de desempenho utilizados pela administração, normalmente utilizados por nossos concorrentes no setor de software como serviço, bem como índices não GAAP para ajudar os leitores a compreender o desempenho da Empresa. Essas medidas não têm nenhum significado padronizado e, portanto, provavelmente não são comparáveis a medidas semelhantes apresentadas por outros emissores e não devem ser consideradas isoladamente ou como substituto para medidas de desempenho preparadas de acordo com o GAAP.
A administração utiliza essas medidas financeiras não GAAP e complementares, bem como índices não GAAP e indicadores-chave de desempenho, para analisar e avaliar o desempenho operacional. A Blackline também acredita que as medidas financeiras não GAAP e complementares definidas abaixo são comumente utilizadas pela comunidade de investidores para fins de avaliação, são medidas complementares úteis de rentabilidade e fornecem métricas úteis no setor da Blackline.
Ao longo deste comunicado à imprensa, são utilizados os seguintes termos, que não têm um significado padronizado de acordo com os GAAP.
A Empresa reconhece as receitas de serviços proporcionalmente ao longo do período de prestação dos serviços, de acordo com as disposições dos contratos celebrados com os clientes. Os termos dos contratos, combinados com as elevadas taxas de retenção de clientes, proporcionam à Empresa um grau significativo de visibilidade das receitas a curto prazo. A administração utiliza uma série de métricas, incluindo as identificadas abaixo, para medir o desempenho da Empresa e as tendências dos clientes, que são utilizadas para preparar planos financeiros e definir a estratégia futura. Os principais indicadores de desempenho podem ser calculados de maneira diferente dos principais indicadores de desempenho semelhantes usados por outras empresas.
Medidas financeiras não GAAP
Uma medida financeira não GAAP: (a) representa o desempenho financeiro histórico ou futuro esperado, a posição financeira ou o caixa da Empresa; (b) no que diz respeito à sua composição, exclui um montante que está incluído ou inclui um montante que está excluído da composição da medida financeira mais comparável apresentada nas demonstrações financeiras consolidadas primárias; (c) não é apresentada nas demonstrações financeiras primárias da Empresa; e (d) não é um rácio.
As medidas financeiras não GAAP apresentadas e discutidas neste comunicado à imprensa são as seguintes:
“Adjusted EBITDA” is useful to securities analysts, investors and other interested parties in evaluating operating performance by presenting the results of the Company which excludes the impact of certain non-operational items and certain non-cash and non-recurring items, such as stock compensation expense. Adjusted EBITDA is calculated as earnings before interest expense, interest income, income taxes, depreciation and amortization, stock-based compensation expense, foreign exchange loss (gain), 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.
Reconciliação de medidas financeiras não GAAP
Um índice não GAAP é uma medida financeira apresentada na forma de um índice, fração, porcentagem ou representação semelhante e que tem uma medida financeira não GAAP como um ou mais de seus componentes.
Os índices não GAAP apresentados e discutidos neste comunicado à imprensa são os seguintes:
O “EBITDA por ação ordinária” é útil para analistas de valores mobiliários, investidores e outras partes interessadas na avaliação do desempenho operacional e financeiro. O EBITDA por ação ordinária é calculado com base no mesmo método utilizado para o prejuízo líquido por ação ordinária, utilizando o número médio ponderado básico e diluído de ações ordinárias em circulação durante os períodos apresentados.
O “EBITDA ajustado por ação ordinária” é útil para analistas de valores mobiliários, investidores e outras partes interessadas na avaliação do desempenho operacional e financeiro. O EBITDA ajustado por ação ordinária é calculado com base no mesmo método utilizado para o lucro (prejuízo) líquido por ação ordinária, utilizando o número médio ponderado básico e diluído de ações ordinárias em circulação durante os períodos apresentados.
Uma medida financeira complementar: (a) é, ou se destina a ser, divulgada periodicamente para descrever o desempenho financeiro histórico ou futuro esperado, a posição financeira ou o fluxo de caixa da Empresa; (b) não é apresentada nas demonstrações financeiras da Empresa; (c) não é uma medida financeira não GAAP; e (d) não é um índice não GAAP.
As medidas financeiras complementares apresentadas e discutidas neste comunicado à imprensa são as seguintes:
Nota sobre declarações prospectivas
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 of deployments being completed in the second half of the year, that the appointment of our Chief Growth Officer will help drive improved operating performance across our regions, including Europe; the evaluation of additional focused measures to optimize operating performance and accelerate timeline to profitability; the forthcoming G6 launch to disrupt the zero maintenance gas detection industrial market, the timeline of launch, and confidence in the potential for the product and service to take share in their respective market. 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.