Ottawa-based BluMetric is riding high these days on a green wave. That's true from an environmental engineering perspective and when it comes to the company's financial results. The cleantech firm ended fiscal 2021 with sales growth of 24 per cent, leading to record revenue and a record EBITDA of $5.3 million. The strong financials allowed BluMetric to post a top-50 performance on the TSX Venture Exchange.
In this episode of Techopia Live, OBJ publisher Michael Curran talks with the CEO of BluMetric, Scott McFabe, about how his team plans to leverage the company's improved financial performance into new opportunities and growth potential. This is an edited transcript of that conversation.
OBJ: Let's get our audience up to speed on who you are as a CEO. Give us some of your career highlights, Scott.
SM: I hail from London, Ontario, went to University of Waterloo, and I studied hydrogeology. Once I graduated, I worked for an environmental engineering firm around Toronto. Shortly after I joined, the firm merged with a global consulting firm that was based in L.A. I got to know the C-suite of that organization really well, and they tapped me on the shoulder to say they’d like to see me come to the States and operate there. So essentially, a three-year assignment turned into 25 years. Then about four years ago, a former graduate friend of mine tapped me and said, "We're looking for a new CEO for BluMetric. We need to take a different direction. Would you be interested in throwing your hat in the ring?" And I did so and haven't looked back since. So I'm delighted to have been chosen as a new CEO. So I've been at this about four years and looking forward to a great future.
OBJ: So let's just zoom in on BlueMetric, Scott. The company has been around for quite a while, publicly traded, but give us the elevator pitch.
SM: The firm comes from two parent companies, and the parent company that I'm most familiar with was Water Science Associates, WESA. They're based here as a top shelf consulting company, always really highly respected and does great work. So, the RTO happened and after that they struggled a little bit with the integration and so on. At the point of bringing me on board, the goal was really to de-risk the firm and get us to a point where we had a nice clean balance sheet and we had an opportunity to grow. We've accomplished, I would say, a five-year plan in three years. We've already refreshed our strategy.
OBJ: Help us wrap our heads around some of the key facts here. In terms of number of employees or service lines, product lines, tell me a little bit more.
SM: Ours is a really unique blend of services and technology. The consultancy side of the business is a combination of engineering, scientists and industrial hygienists, and we have a geomatics group as well, with drones and such. And for water tech, we have a shop just outside of Ottawa and Kars where we actually design and manufacture water treatment systems, currently, mostly for the Canadian Department of National Defense. So, if you're in a real Canadian Navy boat, the chances are if you're drinking clean water, it's through a system we built. It's basically mission-ready water. It's our technology.
OBJ: Neat stuff, and I saw that you were shortlisted by the Canadian Armed Forces on some innovation they're doing. So, in Kars, how many employees, Scott?
SM: The total company is a little over 170 people. Our revenues are a little over 35, 36 million dollars, in that range. The services, as mentioned, really line up with what you described. It's the engineering sciences, environmental sciences, industrial hygiene and geomatics. As for the customer base, it's really four markets we look after. It's military, commercial, industrial, mining and government. Our military market is almost completely water tech. The military really appreciates our water tech. We also have a helmets to hard hats program, where we bring in ex military to be part of our field service representatives team to go out and make sure once we sell somebody a system that it operates. If it has an issue, we get on it right away and we're up and running immediately. It's not just design, produce, sell. It's really support. An interesting point for the firm, too, and our employees, is we're almost 50-50 split in terms of gender equity, which we think is great, because in a business like ours, it's usually heavily loaded with people who look too much like me. I think we're at 55 per cent men to 45 per cent women, which is part of our success actually.
OBJ: That must create quite a unique culture, I would imagine, different from lots of other engineering and cleantech firms, Scott.
SM: It does and I think it also adds a gravity in terms of hiring and in terms of how we operate. We're very inclusive, we're very supportive. It's a well-run business, but at the same time, I don't have an administrative assistant, I answer my own phone, I like to stay involved. I'm very much a player coach. I love the business and love clients, and I'll never want to give that up. I think that's what makes you half-decent if you're gonna be any good in this business.
OBJ: Absolutely, and Scott, BluMetric had a fantastic 2021, with record financial results as I teased before, a top 50 performance at the TSX-V and we're going to dig into that. 2021 wrapped up for you guys several weeks ago and it was a great year. I mean, you're in a pandemic, and you're posting 24 per cent revenue growth and record net earnings. What was driving those results, Scott?
SM: Well I think number one is if we can't do it safely, we won't do it at all. When I first came to the firm, I'll reel it back a bit there, we were talking about a pandemic plan before there was a pandemic, believe it or not. I was very fortunate to have studied under a very capable CEO in the States and the position was if you can operate in a pandemic, you can operate any time. So 20 years ago, we had a pandemic plan for this other practice that I was a partner in. And so when I came to BluMetric, we started the discussion about what a pandemic plan would look like. We made heavy investments in the first year in our IT infrastructure that was really in need of investment. In other words, we could operate remotely if need be, have proper safe servers and have access to files. We very heavily leveraged our industrial hygiene group, which I think is really unique for us, and we're very grateful to have experts, some international, to be able to design a program for how we can operate safely in the event that we have to shut our offices down and still perform essential services. That was key. The firm was 100 per cent vaccinated, and that's been a real challenge and success. So we managed to operate safely and appropriately with the right guidance, we had a lot of empathy with our clients, we wanted to make sure we stayed close to our clients as they define their needs and we solve their biggest problems and do that safely. Since I came on board, we really ignited our project management systems and our people to make sure that we're operating in a way that is profitable and operating and supporting clients that appreciate our value proposition. We want to make sure we work with clients that really do value what it is that we provide and we deliver on the promise of the value that we offer.
OBJ: I don't think I've talked to a CEO that said they had a pandemic plan before the pandemic so bonus points for that one, Scott. BluMetric was recognized by the TSX-V as a top 50 performer in 2021. Your share price appreciated 300 per cent, and you were telling me that it's actually a top 10 recognition if you look at the category of cleantech, so something to celebrate there internally.
SM: It is. We've gone from the pits to the pyramids, really. Everyone's worked extremely hard for these results and we intend to continue that effort. And when you independently are recognized for that performance, purely on the basis of your results, it's a great feeling. It instills the confidence that our people need and the pride that our people deserve to have to operate at a well-run company and see the benefits of that. We have to produce profit. We have to operate in a way that has a clean balance sheet, that we manage our risks, de-risk the firm continually and continue to search for new clients that accept and appreciate our value proposition. Making all of those changes in a fairly short period of time, and having that work, really does come to bear. With this recognition, I think it's a chance for me to put it on record that I couldn't be more grateful or proud of the people that helped produce this result. And that's really the hallmark of the company.
OBJ: Good for you for sharing that success. As we wrap up, Scott, help us look forward. What big milestones is BluMetric pursuing right now?
SM: Well, now that we're essentially out of debt, we have some debt we've refinanced, but at a very, very low rate, as we can see rates are going to increase, so we'll have that paid off in no time. We're looking at technology very seriously, especially with rural conditions, and our technology is mission-ready water in a world of uncertainty, we say. The demand for that is ever increasing. So, finding ways to make that scalable and mobile and accessible and scale it up quickly is critical. To be able to roll in on a boil ban and operate our system in very short periods of time to produce potable water. We recently were awarded the next stage in the government ideas program where we’re working on mobile waste water treatment with SNC-Lavalin. We're not looking to acquire just for the basis of inflating our numbers. We want to make sure that we make good, smart decisions that fit the business and produce a resilient future for us. I'd say look for us to start demonstrating how we've scaled and developed our technologies to be more mobile and at the ready because most definitely water resiliency is key these days and even more so in the future. That's really where we're focusing our time. And then of course, continuing to look for and working with great clients that appreciate what we do.