Clear Blue Technologies International Inc. (“
Clear
Blue” and the “
Company”) (TSXV: CBLU)
(FRA: 0YA) (OTCQB: CBUTF), the Smart Off-Grid Company™, announces
its financial results for the quarter ended September 30, 2022
(“
Q3 2022”). A complete set of Financial
Statements and Management’s Discussion & Analysis
(“
MD&A”) has been filed at www.sedar.com. All
dollar amounts are denominated in Canadian dollars.
Key Financial
Results
On a Trailing Four Quarter
(“TFQ”) basis:
- Revenue was
$4,090,017 for the TFQ ending Q3 2022, down from $9,021,716. The
decline in revenue was due to customer delays in site deployments
as a result of supply chain shortages of telecom equipment, capital
project spending delays, and cumulative global economic issues over
the last three years;
- TFQ Recurring
Revenue was $736,969, a 51% increase from $488,136 in the
corresponding TFQ of 2021;
- Gross profit
percentage was up 1% to 30% from 29% in the prior TFQ period of
2021. This represented a gross profit of $1,238,245 as compared to
$2,607,287 for the prior period;
- Non-IFRS Adjusted
EBITDA was $(3,792,410) versus $(2,558,365) for the previous TFQ of
2021.
For Q3 2022:
- Revenues were
$451,421. Q3 revenue was adversely impacted by $1.1M due to an
unfulfilled Q3 order and a Q1 order reversal because of customer
non-payment. Additionally, a key telecom customer delayed a $1M
project due to a supply chain issue with their telecom equipment
component availability, which is now expected in 2023;
- Bookings were
$1,814,037, up 18% from $1,536,118 as of December 31, 2021;
- Recurring revenue
comprised $142,940 of total revenue and increased 14% from $125,612
in Q3 2021. Ongoing services revenue is expected to increase yearly
as more units are deployed;
- Gross profit was
$135,575 or 30% compared to $882,139 or 39% for Q3 2021;
- Quarterly
Non-IFRS Adjusted EBITDA was $(987,427) versus $(336,282) in Q3
2021.
Key Balance Sheet Updates:
- The Company was
awarded a $5-million R&D grant from Sustainable Development
Technology Canada. The grant will fund the development of Clear
Blue’s Pico-Grid product, as well as enable Clear Blue to bring
machine learning artificial intelligence into its industry-leading
management cloud platform, Illumience. The first tranche of this
grant is expected in Q4 2022;
- The Company
received the first monthly payment from the $4-million
interest-free non- dilutive financing agreement that it was awarded
from the Government of Canada through the Federal Economic
Development Agency for Southern Ontario. The funds from this
financing will provide monthly cash payments to the Company until
March 2024;
- The above two
non-dilutive financings will provide coverage for approximately 60%
of the Company’s net cash burn monthly expenses. As a result, the
Company expects to achieve net zero cash burn in 2023, even taking
into consideration a very conservative budget for the year.
Moreover, with recent cost-cutting initiatives in place, the
Company expects to reach positive adjusted EBITDA at approximately
$8 million in annual revenue, down from a previous $12-$14M revenue
needed for positive adjusted EBITDA;
- Management has
the ability to reduce costs and add capital to the business in
order to ensure a net zero cash burn for 2023.
Management Commentary
and Outlook
While Clear Blue was able to deliver strong
growth in 2020 and 2021, the cumulative effects of three years of
Covid-19, supply chain issues, the war in Ukraine and the current
global economy have impacted the Company’s 2022 results. The YTD
results reflect the impact of this and were specifically impacted
by over $2.1 million in revenue from two customers – one who was
unable to secure their financing and another who is experiencing a
delay in the shipping of the telecommunications equipment that
Clear Blue powers.
Clear Blue anticipates that Q4, too, will
continue to be a soft quarter. From a guidance perspective, the
Company now believes that many customers are currently deferring
much of the remainder of their 2022 plans to 2023. With this
increased level of customer caution, the Company now expects its
2022 year-end results to come in below the guidance range reported
in August.
“During Q3, Clear Blue’s most critical focus was
to secure its balance sheet and ensure sufficient working capital
to manage through this uncertain economic period that is affecting
many of our customers and prospects,” said Miriam Tuerk, CEO of
Clear Blue. “The $9-million grant and interest-free loan that we
secured from the Government of Canada provides a strong foundation
to grow our business over the next 18 months. As a result, we
expect the Company to be in a cash-flow-neutral position even with
very conservative revenue assumptions.
From a medium- and long-term perspective, Clear Blue has a very
robust $400 million sales pipeline. The Company’s confidence
in the prospects for revenue growth is largely driven by a strong
level of customer interest in solar, which we see accelerating, and
we have early Bookings that give us visibility for strong growth in
the first half of 2023.”
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 Tuesday, November 29, 2022. Those interested can
register at
https://us06web.zoom.us/webinar/register/WN_vPn7TlUWTpW7d7-Nz_LVtA.
For more
information, contact:
Miriam Tuerk, Co-Founder and CEO+1 416 433
3952investors@clearbluetechnologies.comwww.clearbluetechnologies.com/en/investors
Nikhil Thadani, Sophic Capital+1 437 836
9669Nik@SophicCapital.com
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 37 countries,
including the U.S. and Canada. (TSXV: CBLU) (FRA: 0YA) (OTCQB:
CBUTF)
Legal Disclaimer
Neither 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" and/or "forward-looking statements"
within the meaning of applicable securities laws. Such
forward-looking information and forward-looking statements are not
representative of historical facts or information or current
condition, but instead represent only Clear Blue’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
financial results and future upcoming contracts.
By identifying such information and statements
in this manner, Clear Blue 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 Clear Blue to be
materially different from those expressed or implied by such
information and statements.
An investment in securities of Clear Blue is
speculative and subject to several risks including, without
limitation, the risks discussed under the heading "Risk Factors" in
Clear Blue's listing application dated July 12, 2018. Although
Clear Blue 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, Clear Blue has made certain assumptions. Although Clear
Blue 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. All subsequent written and
oral forward- looking information and statements attributable to
Clear Blue or persons acting on its behalf is expressly qualified
in its entirety by this notice.”
This news release does not constitute an offer
to sell or a solicitation of an offer to buy any of the securities
described in this news release. Such securities have not been, and
will not be, registered under the U.S. Securities Act, or any state
securities laws, and, accordingly, may not be offered or sold
within the United States, or to or for the account or benefit of
persons in the United States or “U.S. Persons”, as such term is
defined in Regulation S promulgated under theU.S. Securities Act,
unless registered under the U.S. Securities Act and applicable
state securities laws or pursuant to an exemption from such
registration requirements.
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