BluMetric Environmental Inc. (BLM) Earnings Call Transcript & Summary

Welcome to Planet MicroCap. I'm your host, Robert Kraft, and joining me right now is Scott MacFabe. He's the CEO of BluMetric Environmental. It's a publicly traded company. I got 2 symbols for you. BLM on the TSX Venture and BLMWF on the OTCQX. And BluMetric will be presenting at our upcoming investor conference, Planet MicroCap Showcase in Vegas in partnership with MicroCapClub taking place April 22 through 24, 2025 at the Paris Hotel & Casino. For more information to register to see the BluMetric presentation, meet with them one-on-one. Go register to attend at planetmicrocapshowcase.com. And with that, Scott, thank you for joining me today. How are you doing?

I'm great, Robert. Good to see you. How are you?

Just getting ready for what feels like 10 weddings in one, but we're just -- we're making do. We still got 2.5 months here. So we're just gearing up. But Scott, I appreciate you taking the time here today and catching up with me. We did an interview together that we published last year in early September, September 3, 2024. But before we get into update and everything like that, for those that don't know the BluMetric story, can you give us a quick overview of the company and then we'll go?

Yes, absolutely. BluMetric is not a start-up. We've been around as an entity a little over 40 years, and it's the product of a reverse takeover that took about 15 years ago. It's really a water tech company and an environmental consulting solutions company. And so right now, the division of revenue is about half and half. Our water tech is up here outside of Ottawa. We have a fabrication facility for our water products, mostly for Department of National Defense. And we recently finished an acquisition down in Gainesville, Florida for a firm down there, Gemini Water, and they do similar things but for a different client base. And I can get into that a little later, but the firm is about $35 million top line. We closed our year out at the end of last September just before Vancouver's conference. And we just recently reported our year-end results, which included all the costs associated with picking up Gemini, but not revenue yet. That will come at the end of February when you'll see the end of our Q1. But at the end of the day, we're loving it. We're really enjoying the decisions we've made and how things are going with that integration. So with that, I'll turn it back to you.

All right. Well, I'll set you up to kind of give us that update here. Like I said, last interview we did together, put that on September 3, 2024, presented in Vancouver. You can go and check out their presentation also on our YouTube channel. So let's get that update. Again, you alluded to a couple of things already at the top there. Let's get the full picture, what's been going on with BluMetric in the last 5, 6 months.

Thank you. Well, we closed out the year was a steady year. Our top line was expected. And we always had a stated ambition that we wanted to balance out our revenue generation to be half water tech and half consulting. The consulting side of the business is a higher profitability, sticky revenue. It's a nice stable base. The water tech business up here in Canada, we've had for at least 20 years has gone very well. We've got lots of work, a few new products we're working out with the D&D now, a more scaled down mission-ready water product that's agile, a lot easier to deploy, a lot of interest by other NATO countries. But in order to get to a 50-50 split, again, as our stated ambition and business, we're looking for new opportunities, especially looking for an opportunity in the U.S. market. We kind of could see the writing on the wall where things were headed. If we wanted to really participate in the U.S. market, we knew we needed to have a beachhead. And so Gemini Water came to our attention, we competed for that acquisition, and we won. And we believe we won on the basis of culture. It's a great little company down there. They do a lot of the work for island nations. The issue there is really that every island pretty much in the Caribbean or what have you, they're all depending on their water supplies, but there's a lot of saltwater intrusion that's happening that's turning the wells into -- from clean to brackish to saltwater, so desalination is the only option. And that's what Gemini does very, very well. They do desal systems. And they've got a lot of work going on. They also do package or sizable wastewater plants, membrane bioreactors, exactly the same kind of tech that we use up north. So the nice thing was during our due diligence, if you walk through our shop up north, you see what we do, the kind of equipment we work with, you go down in Gainesville, it's almost the same. But the sales cycle for D&D is very long up here, bigger contracts, but a long sales cycle. But the nice thing with Gemini is they work mostly with commercial, industrial and government -- large government contracts. Just before we closed on them, they had a USD 14 million win in St. Kitts and Nevis to put in a 3 million gallon per day water purification system, which we're currently doing now, give you an idea of what they're doing. But the nice thing about that acquisition is, I think over the years, I've been involved with a lot of M&A and so is Dan Hilton. And the biggest mistake you can make is just being so excited about what you buy, you're going to buy more as opposed to really focus on the integration, really support that integration, see really great organic growth, post inorganic growth. And happy to report we're like 4 months after the acquisition. There's a huge demand for what it is that they've got going on down there, lots of new work. We just had another press release last night for some new work that we're doing for wastewater complementary system to a water system we're doing on an island nation in the Caribbean. We've been visioning with the managing partner down there that we work with. He's on board. We're bringing in and hired some of his best friends. It's always like bring the band back together, and it's going to go really well. And so we've got one of the 30-year veteran expert who's coming from Australia to be back in Gainesville to work with his old friend to help us really build out mostly our operation and maintenance business as it relates to the tech. And I also have another fellow there that's coming in to help with operations. So you can free up the rainmaker and go out and build. And so since we brought Gemini on board, we've doubled in terms of headcount. They've gone from where they were to twice their size, so we can improve our run rate and delivery. We just signed a contract or a lease that's over twice the size of the facility they're in now. We'll go from about 10,000 to 25,000 square feet. That just happened yesterday. So we're really fired up about getting behind them and building and supporting what it is that they do. And of course, with all that's going on in the world right now, the only access to the American market, I think, is really rightfully to do it the way that we're attempting to do it, and that is we have to have it in America, by Americans for Americans. And then just build from there and then take advantage of each other's strengths north and south of the border. So a lot of fun. I would say that already, they're exceeding our expectations. Everybody stayed on. Everybody seems to be enjoying what we're doing. And I think a lot of that just has to do with good due diligence and respecting who they are and supporting them and not just trying to turn them into another us. It's like what are we together and go from there.

You mentioned the picture because of culture. I think it's -- you say it all right there in that last sentence. So -- last few sentences. So this is one of our quick hit or one-on-one. I'm going to invite you back to be on the podcast, so we can do a full longer form one so we can dive even deeper into BluMetric. But to close this out here from what you can tell us, kind of alluded to a couple of things already. But -- and by the way, just for a time stamp, we're recording this on Thursday, February 6, 2025. So people can have that in their minds. But again, from what you can tell us moving forward here, what would you say are some of the company's value catalysts that you want folks to pay attention to here in 2025?

I think I've kind of alluded to it. It's the organic growth post acquisition. Now what can this entity do down in Florida with the right support. And it's really showing up because the other side of this, too, that we -- I neglected to mention is right after the conference in Vancouver last September, we finished a raise, a $4 million raise with Clarus, and we were oversubscribed within 5 hours. So there's a real demand. Well, at the time, we did the acquisition on our own steam with our own cash, our own credit. With the raise, we're completely out of our $4 million line. We have cash in the bank. Everything is paid for. We're up and rolling. So our balance sheet looks great. The company is rolling forward. And now come -- we'll be reporting at the end of February our first quarter results, which will show the accretionary benefits of having them -- Gemini on our books. and you get to see what does that look like. Aside from a great story, does it actually pencil out and produce the results. And obviously, I can't tell you today, but I think it's a great thing for your investor base, if they're curious to take a good look at where we think we're headed. And by the time we report out at the end of February, we'll see what the math looks like. But we're pretty excited.

Absolutely. Well, Scott, with that, where can our audience go and find more information on BluMetric?

Well, you can go to our BluMetric website, this blumetric.ca. You'll see a lot of the information on there as well. And any of the press releases, you can just pull up and take a look and all the contact information is there and all the updates. You can go to our news section. You'll see all the updates and press releases are -- and get caught up, but it will have most of the information you need there.

Absolutely. And that's BluMetric with no E.

That's correct.

With no E. Dan, I'm sorry. Well, with that, Scott, I really appreciate you guys. Thank you so much for joining me here today. Good luck. Stay safe, and we'll see you in Vegas.

All the best. Take care. Thank you.

Thank you.