Increased Profitability with Strong Cash Position and Continued Investments in Research and Development.
BPLI Holdings Inc. ("BPLI" or "the Company") (TSX-V: BPLI) today reported its financial results for the three months ended June 30, 2020.
BPLI consolidated revenue for the three months ended June 30, 2020 was $6.5 million, down from $6.8 million for the same period in the previous year, a decrease of 5%. Gross profit for the period was $3.0 million, a decrease of $0.4 million over the three-month period ended June 30, 2019. Pre-tax income was $1.2 million for the current quarter compared to $0.2 million for the same period in the previous year. After tax income for the three months ended June 30, 2020 was $0.7 million compared to $0.1 million for the same period in the previous year.
The Bluedrop Training & Simulation business unit revenues were $4.9 million, down from $5.5 million for the same period in the previous year, a decrease of 11%. Revenues from Courseware development services and in-service support were up for the period. Revenues from simulation products were down by $1.4 million for the period due to timing of product deliveries, and a slowing in procurement. Gross profit for the period was $1.8 million, a decrease of $0.6 million over the three-month period ended June 30, 2019. Expenses for the quarter were down $1.0 million from that of the same quarter in the previous year. Pre-tax income was $0.9 million for the current quarter compared to $0.5 million for the same period in the previous year.
The Bluedrop Learning Networks business unit revenues were $1.6 million, up from $1.4 million for the same period in the previous year. Revenues from Software licencing and subscriptions increased to $1.2 million up from $1.0 million while Courseware development services were the same at $0.4 million. Gross profit for the period was $1.2 million, an increase of $0.2 million over the three-month period ended June 30, 2019. Expenses for the quarter were up $0.2 million from that of the same quarter in the previous year. Pre-tax loss was $0.2 million for the current quarter compared to a loss of $0.2 million for the same period in the previous year.
The Company had positive cash flow from operating activities and from financing activities including additional new unsecured long-term debt in the quarter. The Company ended the quarter with cash on hand of $6.5 million. The company made an early repayment of its term loan with Nova Scotia Business Inc. in the period and now has no secured long-term debt nor any term debt with financial covenants.
The Company invested $1.5 million in the quarter and $5.5 million over the last 12 months in Research and Development. The Bluedrop Training & Simulation business unit will continue its investments to meet the development and delivery plans for the new crew training simulators. The Bluedrop Learning Networks business unit will continue its investments to develop additional features and scalability capabilities for its SaaS platform.
The Company noted that while the ongoing COVID-19 global pandemic has created additional risk and uncertainty around future plans and activities, the event has had minimal disruption to most of the Company’s ongoing operations as of the current date. There is added uncertainty for various simulation product deliveries and schedules due to travel restrictions and potential procurement delays as a result of the pandemic.
For further details, please see the Financial Statements and Management’s Discussion and Analysis for the quarter ended June 30, 2020 which are available on the Company’s web site at www.bluedrop.com or on SEDAR at www.sedar.com.
Commenting on the quarterly results, Founder and CEO Emad Rizkalla said, "We continue to perform very well in both business units for ongoing operations and are fortunate to have longer term contracts in place that should provide us with a strong ongoing business. We are seeing some delays in delivery of certain simulator products in the Training and Simulation business unit but feel this will get back on track as the travel restrictions are gradually lifted and procurement systems get back on track. The Learning Networks business unit has been busy and developed several unique products for COVID-19 training. Overall, the financial results are very encouraging, and we remain optimistic that we will continue with strong operations in both our businesses while continuing to invest in Research and Development programs. We had very strong cash flows during the quarter while also paying down the only remaining long term debt facility with any security pledged thereon. The Company ended the quarter with $6.5 million in cash and no draw on our line of credit facility. The True Blue team has been active in the last few months providing funding to those most in need. Thank you to everyone for your dedication and support at these difficult times. Our goal is to come out of this smarter, stronger, and kinder."
About BPLI Holdings Inc.
BPLI Holdings Inc. (TSX-V: BPLI) is the holding company for its investments in Bluedrop Training and Simulation and Bluedrop Learning Networks. Our companies are innovators in both the development of workplace e-learning and simulation as well as the way large organizations deliver, track and manage training. Our two divisions serve the world’s leading aerospace and defence organizations as well as broad cross sections of organizations focused on managing system wide health and safety and developing the skills of external workforces. BPLI is creating the workforce of the future by improving the effectiveness, speed and cost of training delivery and management. For more information, visit www.bpli.ca. You can follow us on Twitter: @Bluedrop_BPL.
This news release may contain "forward-looking information" as defined in applicable Canadian securities legislation. All statements, other than statements of historical fact included in this release, including, without limitation, statements regarding the impact of the operational restructuring and future plans and objectives of BPLI, constitute forward-looking information that involve various risks and uncertainties. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect, including, but not limited to, assumptions in connection with the operational efficiencies associated with the integration of technological and financial systems and general economic and market conditions. There can be no assurance that such information will prove to be accurate and actual results and future events could differ materially from those anticipated in such forward-looking information.
Important factors that could cause actual results to differ materially from BPLI’s expectations include general global economic conditions and the rapidly evolving effects of the COVID-19 pandemic. For additional information with respect to risk factors applicable to BPLI, reference should be made to BPLI's continuous disclosure materials filed from time to time with securities regulators, including, but not limited to, BPLI's Management’s Discussion and Analysis of Results of Operations and Financial Condition for the quarter ended June 30, 2020. The forward-looking information contained in this release is made as of the date of this release and BPLI does not undertake to update publicly or revise the forward-looking information contained in this release, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
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.
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Treasurer and Corporate Secretary
BPLI Holdings Inc.