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 fiscal
quarter ended March 31, 2020.
Key Financial Results (all figures in Canadian
dollars)
- Clear Blue’s offices were closed in March 2020 as a result of
COVID-19, impacting our ability to ship and recognize revenue for
Q1. As a result, trailing Four Quarterly (TFQ) Revenue of
$3,869,206, a 2% increase over the previous period;
- Quarterly revenues of $238,171 in Q1, a 30% decrease over Q1
2019;
- TFQ Gross Margin percentage decreased from 25.1% to 22.3%, a
reduction resulting from a new allocation, beginning in Q4 2019 as
a result of our scale, to record direct service cost expenses to
Gross Margin. Without this, TFQ Gross Margin increased to
25.6%;
- Q1 2020 Gross Margin percentage of 32%, relative to 31% in Q1
2019;
- On a TFQ basis, Adjusted EBITDA (see Non-IFRS Measures) was
$(3,703,721) versus $(5,063,072) in 2019, a 27% improvement. Q1
Adjusted EBITDA was ($903,424) versus (1,387,771), a 35%
improvement;
- Clear Blue has undertaken a strong cost reduction plan as a
general part of its overall 2020 plan to improve its EBITDA. In
addition, additional cost reductions were undertaken in March to
mitigate the short-term impact of COVID-19. Additionally, a number
of government COVID-19 funding programs have been obtained in order
to assist in funding of salaries over the period.
Subsequent Events
The period following the quarter end on March 31, 2020 was
notable for the Company with the following outcomes:
- On April 20, 2020, the Company announced the signing of a Large
Rollout project with an initial purchase order for 50 units of a
planned multi-year 500-unit sale. The contract envisages 2020 sales
for Clear Blue of an estimated $3.5 million;
- On April 14, 2020, the Company arranged additional liquidity
through a $5 million loan from BDC Capital Inc. The Company has
received the first $2 million tranche with an additional $3 million
available by meeting certain financial milestones.
Chief Executive Officer Remarks
As with most firms, the pandemic has had an impact on Clear
Blue. However, we have a number of factors that bode well for our
future:
- The majority of Clear Blue’s revenue is in the second half of
the year, so the timing of our shut down could minimize the
impact;
- We believe the telecommunications sector is a critical
industry, illustrated by our dependence upon online services
through this period. Coming out of the pandemic, we believe that
telecommunications services will be in great demand, boding well
for our telecom vertical;
- Additionally, as many in industry and government are now
discussing, post pandemic economic stimulus and investments may be
focused on climate change, which bodes well for our business across
all verticals and geographies.
Clear Blue’s team has been working hard through this period
reading ourselves for the next level of scale that we anticipate
for 2020. While the future has a great degree of uncertainty, we
are optimistic and working very hard on all fronts to ensure we
emerge as the industry leader with strong growth and returns for
our shareholders as well as beneficial technologies and services
for our customers.
Q1 2020 Revenue and Gross Margin
TFQ revenue for the period ended March 31, 2020, impacted by the
office shutdown due to the pandemic, was $3,869,206, an increase of
2% over revenue of 3,795,626 in the TFQ period ended March 31,
2019. Revenue for the three months ended March 31, 2020 was
$238,170 a decrease of 30% over Q1 2019 revenue of $340,266.
On a TFQ basis, gross margin was $862,030, a decrease of 10%
over TFQ gross margin of $954,081 for the previous equivalent TFQ
period, the decrease due to new allocations out of operating
expenses and into COGs. Without that, gross margin would have been
$992,161 or 25.64%. Gross profit was $77,134 or 32% for the period
ended March 31, 2020, an increase from 31% the same period in
2019.
Q1 2020 Operating Expenses
Operating expenses for the TFQ ended March 31, 2020 were
5,426,746, a decrease of $765,893 or 12% compared to the same
period in 2019. Quarterly, operating expenses decreased by $253,905
or 17% for the three-month period ended March 31, 2020 versus
2019.
Non-IFRS Adjusted EBITDA
The company now reports Non-IFRS Adjusted EBITDA. For the TFQ,
adjusted EBITDA was $(3,703,721) as compared to $(5,063,072) for
the previous TFQ. Quarterly, Q1 2020 Adjusted EBITDA was
$(903,424), a 35% improvement over Q1 2019.
Q1 2020 Net loss and comprehensive loss
TFQ net loss of the period ended March 31, 2020 was $(3,703,721)
compared to $(5,063,072) for the TFQ ended March 31, 2019, a 27%
improvement. For the quarter, the company reported a net loss of
($1,100,790) versus to a net loss of ($1,467,859) in Q1 2019, which
is a 25% improvement.
Outlook
Clear Blue competes in a marketplace where most competitors
focus on large, on-grid systems or on one-time sales of hardware
products. The Company’s focus is on the wireless off-grid
market and our business model focuses on an ongoing Energy as a
Service where customers receive long term assurance of reliable
power. For this service, the Company is paid additional revenue
over time for that reliability. As a result, Clear Blue maintains
its first mover advantage through the experience generated from
more than 5,000 units deployed in 37 countries and more than 2.4
million days of operating data generated by managing these
facilities from our Toronto headquarters. This data and our
operational track record are significant competitive advantages in
every potential sale.
Q1 has traditionally been a slow quarter for Clear Blue. In 2018
and 2019, Q1 represented 9% of the full year revenue. As a result,
the results from Q1 2020 may not have a meaningful impact on the
full year 2020 results. That being said, the continued shut down
and slow down due to the pandemic, the longer it occurs, could
begin to impact Clear Blue more significantly. As of today, our
book of sales is higher than it was last year, but some of the
large contracts we expected, while still ongoing, are materializing
more slowly due to disruptions in our customers’ operations.
Our focus on expense management and our previous R&D
investments are beginning to yield stronger bottom line results,
with a 35% improvement on the bottom line. We believe our continued
efforts will yield positive results in that respect.
For guidance, we have previously provided forecasts of telecom
Proof of Concept, First Installs, and Rollout orders as a measure
of future opportunity. While these activities are continuing to
progress, the speed and pace of these initiatives may be affected
by COVID-19 related shutdowns. Given the COVID-19 pandemic, the
Company cannot provide an estimate of similar projects for 2020 at
this time, although it has already received orders for one new POC
and 1 First Install in 2021.
From a long-term perspective, management believes its market
potential remains very strong. This confidence derives from the
Company's strong sales funnel and continued customer interest
throughout this period. Additionally, the company believes that the
telecom sector and clean energy marketplace will be areas of key
investment and growth for the coming years, positioning Clear Blue
as a company with strong growth potential.
Conference Call The Company will host a
conference call to discuss its latest financial results at 11:00 AM
Eastern Time (Canada/U.S.) on Thursday, 28th of May 2020. Those
interested can register at
https://zoom.us/webinar/register/WN_sG3jLx3iR1GIcaoRw5xz4Q
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 TSX 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,
including the potential for a successful Rollout project win in
2020. 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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