Blackline Safety Posts Record Year

     Blackline Safety (BLN) had a record year in 2020 - a year not great for business because of the pandemic.But annual revenue,at $38 million, was 15% better than 2019 and Q4 revenues were up 31% to $7 million.But BLN was more proud of it's recurring revenues which at $25 million were ahead 42% from 2019.BLN was proud because they recorded these gains in the year of the pandemic.And there were fewer products shipped because of the pandemic.Fourth quarter revenues were especially strong with a 31% increase to $12 million.

     Annual Highlights  

    BLN had a moderate growth year in 2020 with revenues increasing by 15%.And their gross margin showed some improvement because of BLN's better market share.As a result BLN showed significant improvement in adjusted EBITDA from $.5 million in 2019 to $5.5 million in 2020.But still does not record any net income as they showed a small net loss in 2020.BLN expects revenues to grow only to $35-40 million in 2021.But using the fourth quarter as a benchmark this blog thinks that annual revenues should be $45-$50 million.And this increase might improve their margin by another 1%.Blackline must increase adjusted EBITDA and show a small net income in 2021.         

 

     If Blackline cannot improve it's overall market share then it must make one or two small tuck-in acquisitions.Revenues must be increased to cover overhead costs and earn a net income in 2021. It could be said that 2021 is close to or is a breakeven year.It is time to show earnings and e.p.s. for it's shareholders and new investors.

     It is true that BLN had a record year but it's guidance at $35-$40 million will not increase EBITDA and net income sufficiently.It is time to make some nimble moves to increase revenues.Guidance should be in the $45-$50 million area.And this will take at least one accretive acquisition.If this is done then it's shareholders can expect the share price to move gradually towards $9.50-$10.00.      https://www.zacks.com/   https://www.moneysense.ca/