Annual revenue up $6.1M compared to prior year
Calgary, AB — Blackline Safety Corp. (TSX Venture: BLN), a global leader of gas detection and connected safety solutions, announced record fourth quarter and annual results for its fiscal year ended October 31, 2018.
“Fiscal 2018 was our first complete year of promoting our G7 connected safety solutions to a global base of industries and businesses with diverse requirements,” said Cody Slater, Blackline CEO and Chairman. “Blackline’s new G7 portfolio drove growth throughout the year, seeing the Company generate total revenue 53% above the prior year. More importantly, looking at our recurring service revenue, we open 2019 with a run-rate of over $14.4M — equivalent to 81% of last year’s total revenue.”
Speaking about Blackline’s growth, Mr. Slater said, “During 2018, Blackline saw growth through all markets as the G7 product was rolled out throughout the world. This growth was particularly impressive in Europe, up 151% and 124% in the United States, driven by G7 adoption in the utility and global industrial sectors. The success we saw here can only be strengthened as we invest in the growth of our sales and distribution network and continue to invest in the expansion of our product line into 2019.”
Addressing product development, Mr. Slater said, “During 2018, Blackline continued to strategically invest in technology development to maintain our leading position in the connected safety sector that we created with G7. Extending our competitive lead, we released a new photoionization detector, a new pump cartridge for confined space entry, an industry-leading data analytics platform and new push-to-talk capability that enables workforces to use G7c like a walkie-talkie.”
“Throughout 2019, we will see new products developed by our in-house team, further extending our leadership position in the connected safety marketplace. We will also continue expanding our distribution network that helped to achieve strong growth beyond Canada, further investing in the United States and Europe while also broadening our focus to other international regions. As we look to the fall, Blackline will introduce G7 Exo, our new area monitoring product line that will be sold alongside our employee wearables, substantially increasing the sales opportunities across each of our industrial sectors.
Fourth quarter highlights
- Fourth quarter total revenue of $5.5M, a 30% increase over the prior year’s Q4
- Fourth quarter service revenue, including lease revenue, of $3.6M, a 69% increase over the prior year’s Q4
- Fourth quarter Blackline Complete lease revenue of $0.9M, a 79% increase over the prior year’s Q4
- Fourth quarter revenue grew by 195% in the United States and by 82% in Europe over the prior year’s Q4
- To support company growth, closed a bought deal private placement for net proceeds of $29.4M, raising cash and short-term investments to $39.7M at October 31, 2018
- Announced a $1.9M lease agreement with a Canadian energy company in Q4
- Launched G7c push-to-talk that enables teams to collaborate with each other like a walkie-talkie
- Announced a new area monitoring system that is scheduled for release in 2019
- Ranked on the PROFIT 500 list of fastest-growing companies for the sixth consecutive year
- G7 Insight named Internet of Things and Industrial Hygiene — Gas Monitors winner by OH&S magazine
Annual highlights
- Annual total revenue of $17.8M, a 53% increase over the prior year
- Annual product revenue of $6.5M, a 53% increase over the prior year
- Annual service revenue, including lease revenue, of $11.3M, a 53% increase over the prior year
- Annual Blackline Complete lease revenue of $2.7M, a 93% increase over the prior year
- Annual revenue in the United States increased by 124% and in Europe by 151% over the prior year
- Contracted future service revenue (lease commitments) grew to $8.0M at October 31, 2018, an 82% increase over the prior year
Financial Highlights
The subsequent values in this release are in thousands, except for percentages and per share data.
| Quarter Ended October 31 | Year Ended October 31 | |||||
| 2018 | 2017 | Change | 2018 | 2017 | Change | |
| Revenue | $5,544 | $4,277 | 30% | $17,772 | $11,619 | 53% |
| Gross Margin | $2,504 | $1,880 | 33% | $7,731 | $5,122 | 51% |
| Gross Margin Percentage | 45% | 44% | 1% | 44% | 44% | 0% |
| Net Loss | ($2,445) | ($2,678) | 9% | ($9,002) | ($8,565) | (5%) |
| Net Loss excluding stock- based compensation expense | ($2,282) | ($1,800) | (27%) | ($7,321) | ($6,947) | (5%) |
| Adjusted EBITDA | ($677) | ($621) | (9%) | ($1,096) | ($1,959) | 44% |
| Loss per Share | ($0.06) | ($0.08) | ($0.23) | ($0.27) | ||
Key Financial Information
Annual revenue for fiscal 2018 was $17,772 compared to $11,619 in the prior year, resulting in an increase of 53% or $6,153. Service revenue was $11,301, an increase of 53% compared to $7,386 in the year prior. These increases were driven by sales of Blackline’s connected safety hardware of $6,471 in the year and by the continuing adoption of the Blackline Complete leasing program that eliminates up-front capital costs and provides customers with a comprehensive safety monitoring program for a monthly fee during a 36-month term.
Fourth quarter revenue was $5,544, an increase of 30% from $4,277 in the comparable quarter of the prior fiscal year. Revenue in the United States increased by 195% and in Europe by 82% respectively with these regions continuing their strong growth during fiscal 2018.
Product revenue during the fourth quarter was $1,931 with an additional 707 Blackline G7 connected safety products being delivered through the Blackline Complete leasing program in this period, an equivalent of $1,021 in hardware sales. Had customers purchased these units rather than adopting Blackline’s lease program, product revenue would have been approximately $2,952, excluding the impact of price discounting.
Service revenue was $3,613, an increase of 69% compared to $2,139 in the same period last year, attributed to new service activations by end customers from product sales, development acceleration program revenues and increased adoption of the Blackline Complete leasing program with leasing revenues increasing 79% quarter-over-quarter.
Contracted future service revenue, representing the current value of future Blackline Complete lease commitments, was $7,959 as at October 31, 2018, an increase of 82% from the prior year-end.
Gross margin for the fourth quarter was $2,504 compared to $1,880 in the comparable quarter of the prior year, an increase of 33%. This increase was driven by the growth of Blackline’s service revenue year-over-year.
Adjusted EBITDA was $(677) for the fourth quarter compared to $(621) in the comparable quarter of the prior year. The decrease in the Adjusted EBITDA for the quarter was attributable to increased selling, general and administrative expenses, offset by an increase in revenues and gross margin quarter-over-quarter.
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, 2018 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.
About Blackline Safety: Blackline Safety is a global connected safety technology leader. Providing comprehensive live-monitoring and wireless gas detection, we help teams working in hazardous environments respond to emergencies in real-time and manage efficient evacuations, accounting for everyone’s safety along the way. With millions invested in technology research and development, Blackline Safety is recognized for quality and innovation. Our talented team of designers and engineers create and manufacture in-house — from wearable technology and personal gas detectors to cloud-hosted infrastructure and web-based interfaces for global industry. We deliver the world’s first turn-key, work-anywhere connected safety monitoring solution with gas detection, 3G wireless, satellite communications, two-way speakerphone, employee messaging and live monitoring to meet the demanding safety challenges of organizations in over 200 countries. For more information, visit www.BlacklineSafety.com.
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