Blackline Safety picks up the Pace in 2018

     Blackline Safety was a quite small and different company in 2016.Since then it has tucked in  a couple of good acquisitions and tells us that it achieved record revenues in 2018 of $18 million.It started as a safety hardware company and is gradually becoming more of a software company.It's principal products are safety related products including a monitor to control the safety of employees.

New Products

Blackline is still principally a hardware company but this bog has recommended a number of small tuck-in acquisitions that if acted upon should ensure growth  of revenues in 2019 will exceed that of 2018. It did earn a negative adjusted EBITDA as well as a net loss for 2018 and this blog expects a negative adjusted EBITDA in 2019..However it's gross margin and it's margin percentage increased over 2017 and the gross margin should increase again in 2019.Blackline still has only 47 million outstanding shares and consequently has room to grow by acquisition in 2019.For example, a secondary issuance of 3 million shares would raise another $10 to $15 million of net proceeds. and would make only 50 million outstanding shares.This would dilute earnings but there won't be much earnings in 2019;still this will dilute future earnings.

Summary          

Blackline, like most successful junior technology companies will have to focus on growing revenues for 2019 and 2020.This blog sees with one or two small acquisitions and the acquisitions they already have that they should earn $25-$30 million in revenues  in 2019.They will have to reap high margins on their traditional products as their new products will likely have lower margins until they reach a threshold level of revenues.They will follow the path of other technology companies focusing on revenues like Shopify. That aside, look for BLN to hit $5.50 to $5.75 this year and maybe $6.00 with a small acquisition. 

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