Clear Blue Technologies International Inc. (Clear Blue or “the
Company”) (TSXV: CBLU) (FRANKFURT: 0YA), the Smart Off-Grid™
company, today reported its financial results for the year ended
December 31, 2018.
Key Financial Results (all figures in Canadian
dollars)
- Trailing four quarters (TFQ) revenue ended December 31, 2018
was $3,780,176, a 65% increase compared to revenue of $2,295,811*
in the TFQ ended December 31, 2017.
- Gross profit for TFQ ended December 31, 2018 was $939,242, a
gross margin of 25%, up from $64,766* or a gross margin of 3%* for
the TFQ ended December 31, 2017.
- Record segment revenues were recorded in the lighting vertical;
and in Canada, the United States (U.S.), and the Middle East and
Africa (MEA).
2018 Revenue and Gross Margin
Trailing four quarters (TFQ) revenue for the period ended
December 31, 2018 was $3,780,176, a 65% increase year over year,
compared to $2,295,811* for the TFQ ended December 31, 2017.
“2018 was a significant year for Clear Blue in terms of both
revenue growth and the milestones we achieved,” said Miriam Tuerk,
Chief Executive Officer and Co-founder, Clear Blue. “We’ve
demonstrated the ability to scale topline growth and drive gross
margin expansion. We also developed existing and new strategic
partnerships with key market players and completed a number of
potentially high-impact first deployments.”
“Our 2018 revenue saw strong growth in the solar off-grid
lighting sector and our North American market, in addition to a
number of first deployments in the telecommunications sector, all
combined with steady expansion in international markets. In 2019,
we’re confident we’ll see even greater growth as many of our
strategic initiatives, projects and partnerships reach fruition,”
said Tuerk.
Clear Blue increased its revenue in the lighting vertical by 88%
to $3,573,878 in the TFQ ended December 31, 2018, compared to
$1,897,441* in the prior year TFQ. Same period revenue from sales
in the telecommunications vertical, which is a new market for Clear
Blue, decreased by 55% in 2018 to $172,574, compared to $383,675*
in the prior year TFQ. Both 2018 and 2017 telecom revenue was from
first deployment projects that the Company believes will result in
significant future growth in this opportune vertical in 2019 and
beyond as these projects scale.
Clear Blue increased its TFQ revenue for the period ended
December 31, 2018 from its Illumient lighting products by 121% to
$2,230,522, compared to $1,011,195* in the same period in 2017.
Revenue from smart off-grid controllers and systems increased by
18% to $1,418,749, compared to $1,205,164* in the same period in
2017. Recurring revenue, which is an area of focus for Clear Blue
as it seeks to decrease the impact of quarterly variability, rose
by 65% to $130,905 in the TFQ ended December 31, 2018, compared to
$79,452* in the same period in 2017.Clear Blue’s gross profit for
the TFQ ended December 31, 2018 was $939,242 or a gross margin of
25%, compared to gross profit of $64,766* or a gross margin of 3%*
for the TFQ ended December 31, 2017. The Company increased its
gross margin through higher prices, efficiencies in supply chain
management and procurement, better inventory management, value-add
services and cost reductions.
Added Tuerk: “We are seeing solar off-grid infrastructure gain
momentum in the U.S. and Canada, as our revenue in 2018 clearly
shows. Clear Blue is uniquely poised to take advantage of this
market opportunity as we see the roll-out of Smart City
infrastructure, solar off-grid street lighting and 5G over the next
5 years. At the same time, we are expanding our sales across
verticals and geographies to diversify, strengthen and accelerate
our revenue streams.”
2018 Operating Expenses and Net Loss
Operating expenses increased by $2,303,460 or 67% to $5,746,142
for the TFQ ended December 31, 2018, compared to operating expenses
of $3,442,682* in TFQ 2017. Of this amount, $356,589 were costs
related to non-recurring reporting issuer costs. The Company also
made key business development and R&D investments to support
increased sales in the telecommunications sector.
In addition, there were a number of one-time expenses in 2018,
which the Company does not expect to reoccur going forward:
- Listing expense, which is a non-cash item ($2,771,817).
- Loss on the extinguishment of the warrant derivative liability
($422,591).
- Non-recurring reporting issuer costs, as mentioned above
($356,589).
For the TFQ ended December 31, 2018, net loss increased
$4,640,640 or 134%, compared to $3,457,927* in the TFQ ended
December 31, 2017. Without the above going public related items and
listing expenses, all totaling $3,550,997, Clear Blue’s net loss
would have increased only $1,089,643 or 32%.
“There is fast-growing demand in emerging markets to wirelessly
power Internet infrastructure, and as such we expect this revenue
stream for Clear Blue to grow significantly over the next 5 years,”
said Lawrence Tjan, Chief Financial Officer, Clear Blue. “In 2018,
we proved our viability in this market by delivering telecom
infrastructure projects in partnership with Telefónica, Mayu, BRCK
and Vanu.”
Q4 2018 Revenue, Gross Margin, Operating Expenses and
Net Loss
As Clear Blue has previously noted, project-based quarterly
revenue is variable at this stage for the Company. To that end,
comparing Q4 2018 against Q4 2017, the Company generated revenue of
$1,120,720 a decrease of 37%, compared to revenue in Q4 2017 of
$1,775,874*. Gross profit for Q4 2018 was $208,573 or a gross
margin of 19%, an increase of $206,200, over $2,373* in Q4
2017.Operating expenses increased to $1,610,438, a 77% increase
from $910,427* in Q4 2017. As noted above, due to going public
related costs, net loss and comprehensive loss for Q4 2018 was
$4,676,028, a 383% increase from $968,205* in Q4 2017.
Outlook
Clear Blue has a first-mover advantage, patented technology, and
proven performance of its smart off-grid products and services in
35 countries worldwide. In the near term, the Company is focused on
attaining positive cash flows and profitability. The growing demand
for solar off-grid street lighting and wirelessly powered Internet
infrastructure creates an opportune market environment to drive its
next stage of growth.
In line with this, Clear Blue expects to see continued robust
revenue growth in 2019 as it expands exclusive partnerships in the
telecommunications sector and builds on its entry into South
American markets. The Company also expanded its sales teams in Q3
2018 and expects to see greater sales in the lighting and IoT
sectors as a result.
On a historical basis, in 2018, the Company’s Q3 and Q4 revenue
accounted for 46% of total revenue for the TFQ ended December 31,
2018, due to very strong sales in the second quarter from a number
of large orders. By comparison, the Company expects revenue
distribution in 2019 to be more in line with 2017 and 2016, when
the second-half of the year accounted for 86% and 83% of total
revenue accordingly.
Quarterly revenue varies due to differences in the size and
timing of new contracts and market expansion rates. The Company’s
long-term strategy is to mitigate revenue variability through
continued diversification of its revenue stream, including an
increase in its recurring revenue from subscription services. Clear
Blue has already undertaken a number of steps toward achieving
this, including the launch of its Energy-as-a-Service product in Q2
2019.
Table of 2018 Results
|
Three months ended** |
|
TFQ ended |
|
Result of Operations |
Dec 31, 2018 |
Dec 31, 2017* |
Change |
Dec 31, 2018 |
Dec 31, 2017* |
Change |
Revenue |
$ |
1,120,720 |
|
$ |
1,775,874 |
|
-37% |
|
$ |
3,780,176 |
|
$ |
2,295,811 |
|
65% |
|
Cost of sales |
|
912,147 |
|
|
1,773,501 |
|
-49% |
|
|
2,840,934 |
|
|
2,231,045 |
|
27% |
|
Gross profit |
|
208,573 |
|
|
2,373 |
|
8689% |
|
|
939,242 |
|
|
64,766 |
|
1350% |
|
Gross margin |
|
19% |
|
|
0% |
|
|
|
25% |
|
|
3% |
|
|
Operating expenses |
|
1,610,438 |
|
|
910,427 |
|
77% |
|
|
5,746,142 |
|
|
3,442,682 |
|
67% |
|
Operating loss |
|
(1,401,865) |
|
|
(908,054) |
|
54% |
|
|
(4,806,900) |
|
|
(3,377,916) |
|
42% |
|
Other expenses |
|
(3,274,163) |
|
|
(60,151) |
|
5343% |
|
|
(3,291,667) |
|
|
(80,011) |
|
4014% |
|
Net loss and comprehensive loss |
$ |
(4,676,028) |
|
$ |
(968,205) |
|
383% |
|
$ |
(8,098,567) |
|
$ |
(3,457,927) |
|
134% |
|
* 2017 results have been restated. **Three
months ended results are unaudited.
Conference Call
The Company will host a conference call to discuss its latest
financial results at 1:30 PM Eastern Time (Canada/U.S.) on Tuesday,
4th June 2019. Those interested can register
at https://zoom.us/webinar/register/WN_Ao5CfJlbRYGZmcF8Ykv_nQ
About Clear Blue Technologies International
Clear Blue Technologies International, the Smart Off-Grid™
company, was founded on a vision of delivering clean, managed,
“wireless power” to meet the global need for reliable, low-cost,
solar and hybrid power for lighting, telecom, security, Internet of
Things devices, and other mission-critical systems. Today,
Clear Blue has thousands of systems under management across 35
countries, including the U.S. and Canada. Clear Blue
is publicly traded on the Toronto Venture Exchange under
the symbol CBLU.
Legal Disclaimer
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Forward-Looking Statement
This press release contains certain "forward-looking
information" within the meaning of applicable Canadian securities
legislation and may also contain statements that may constitute
"forward-looking statements" within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Such forward-looking information and forward-looking
statements are not representative of historical facts or
information or current condition, but instead represent only the
Resulting Issuer’s beliefs regarding future events, plans or
objectives, many of which, by their nature, are inherently
uncertain and outside of Clear Blue's control. Generally, such
forward-looking information or forward-looking statements can be
identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or may contain statements that certain actions, events
or results "may", "could", "would", "might" or "will be taken",
"will continue", "will occur" or "will be achieved". The
forward-looking information contained herein may include, but is
not limited to, information concerning the prospective operating
results and performance of the Company.
By identifying such information and statements in this manner,
the Resulting Issuer is alerting the reader that such information
and statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of the Resulting
Issuer to be materially different from those expressed or implied
by such information and statements.
An investment in securities of the Resulting Issuer is
speculative and subject to several risks including, without
limitation, the risks discussed under the heading "Risk Factors" in
the Resulting Issuer's listing application dated July 12, 2018.
Although the Resulting Issuer has attempted to identify important
factors that could cause actual results to differ materially from
those contained in the forward-looking information and
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended.
In connection with the forward-looking information and
forward-looking statements contained in this press release, the
Resulting Issuer has made certain assumptions. Although the
Resulting Issuer believes that the assumptions and factors used in
preparing, and the expectations contained in, the forward-looking
information and statements are reasonable, undue reliance should
not be placed on such information and statements, and no assurance
or guarantee can be given that such forward-looking information and
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information and statements. The forward-looking information and
forward-looking statements contained in this press release are made
as of the date of this press release, and the Resulting Issuer does
not undertake to update any forward-looking information and/or
forward-looking statements that are contained or referenced herein,
except in accordance with applicable securities laws. All
subsequent written and oral forward- looking information and
statements attributable to the Resulting Issuer or persons acting
on its behalf is expressly qualified in its entirety by this
notice.
Media Contact:Becky Nye Director Montieth &
Company 155 E 44th St., New York, NY 10017
bnye@montiethco.com +1 646.864.3517
Investor Relations:Miriam Tuerk Co-Founder and
CEO+1 (855) 733-0119 x200
investors@clearbluetechnologies.com
http://www.clearbluetechnologies.com/en/investors
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