eResearch | BluMetric Environmental Inc. (TSXV: BLM) recently released its FQ3/2020 results, for the quarter ending June 30, with revenue at $6.9 million, 36% higher than the previous quarter but down slightly from a year ago.
BluMetric is headquartered in Ottawa and provides sustainable solutions for complex environmental issues, including water and waste management solutions.
BluMetric operates both domestically and internationally, employs over 150 professionals operating in ten offices, and offers over 40 years of expertise.
FQ3/2020 Operating Results
BluMetric recorded revenue of $6.9 million in FQ3/2020 slightly lower than the $7.0 million from FQ3/2019. Gross Margins increased to 20% from 18% in the same time period. The Company credits the margin uptick to the implementation of staffing strategies brought about by the pandemic.
Moreover, there was a reduction in discretionary spending offset by an increase in provision for credit losses. The operating costs came in $1.1 million in FQ3/2020 compared with $1.2 million from FQ3/2019.
Reported EBITDA was $1.2 million in FQ3/2020, up from $0.2 million reported in the same quarter last year. The increase in EBITDA was due to government grants of $0.8 million the Company received as a subsidy for employee wages. This same amount of government grants increased net income to $0.7 million in FQ3/2020 from $0.01 million in FQ3/2019.
On the debt side, the Company entered into an amended credit facilities agreement in July 2020. BluMetric renegotiated existing covenants and the borrowing limit changed to $2.5 million shared between its overdraft facility and letters of credit.
CHART 1: BluMetric Annual Revenue and EBITDA (2019-2020)
Note: The low on the chart in FQ2/2020 was due to several low margin, “one-offs” for the military and government markets as well as a goodwill impairment charge of $1.6 million.
Business Lines Highlights
Government market – Revenue went up by $0.55 million in FQ3/2020 compared with FQ3/2019. The result was driven by contracts in Yellowknife, Northwest Territories, and with the Yukon Government.
Military and Mining markets – Even with the COVID-19 impact, revenue went down by only $0.3 million in FQ3/2020 compared with FQ3/2019, as these markets were considered essential and continued mostly uninterrupted.
Commercial and Industrial market – Revenue went down by $0.4 million in FQ3/2020 compared with FQ3/2019. The Company stated that clients in this sector were severely hit by shutdowns and project delays in response to the pandemic.
All-in-all BluMetric affirms third quarter was better than expected, despite the COVID-19 pandemic developments.
Scott MacFabe, CEO of BluMetric, said,
“The theme for our past quarter is one of resilience. Our client mix provided resilience through market diversification, and the resilience of our team of professionals has allowed us to continue to deliver needed solutions efficiently and safely, as has been reflected in our third quarter results. As conditions continue to open up, we are excited about ongoing opportunities to leverage that resilience and our strong reputation in key markets.”
Company Outlook
The Company guidance, for the balance of the year, can be summarized in three key points:
- BluMetric aims to keep a balanced project portfolio across the Company’s key markets and hopes to quickly capitalize when new opportunities arise.
- Due to strategic positioning in the Territories, BluMetric believes it can benefit from strong demand in Nunavut and across the Government sector.
- Based on public health guidelines and on its own expertise in occupational health and safety, the Company will gradually start office re-entry and also provide training to customers in occupational hygiene and COVID-19 protocols
BluMetric closed at $0.135, down from $0.16 at the start of January but above its $0.08 low, reached at the end of March.
Note: All numbers in CAD unless otherwise stated.
