Blackline Safety Corp T.BLN

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[retiredcf]

NSC 2024 HIGHLIGHTS; COMPETITIVE POSITION CONTINUES TO STRENGTHEN

THE TD COWEN INSIGHT

Yesterday, we attended the NSC Safety Congress & Expo and BLN's Analyst event. We think BLN's competitive position continues to strengthen given its focus on innovation that has allowed it to generate vastly superior organic growth (>30%) to its peers. Despite the stock continuing to reach new multi-year highs, it still trades at a significant discount to its peers and historical average.

Impact: SLIGHTLY POSITIVE

Innovation gap continues to widen. Like last year, none of BLN's key competitors have released a major new product in the last year. Most new updates involved modest improvements in device functionality, monitoring software, etc.

Below are highlights from our conversations with company reps:

• ISC - An upgraded Radius BZ1 area monitor is expected in early 2025 that should have embedded cellular connectivity and possibly gamma radiation detection. Natively embedded cellular connectivity for its portable gas detectors (except single gas) is not expected for another year (at least).

• MSA - Working to embed cellular connectivity across its portable gas detection offering (only have Altair io4 now), except single gas. A related 6-gas device launch is expected next year. It is also looking to re-launch its area monitor with cellular connectivity, but the timing is uncertain.

• Honeywell - No plans to embed cellular connectivity (focused on LoRa). Thinks the EXO 8 is strong product and is likely to take share (from its AreaRAE Pro), particularly given the cellular connectivity. Only peer to indicate business being down over the last year.

• Drager - ConHub gateway is expected to launch in Europe in ~6 weeks and hopefully by year-end in NA. Devices connect to ConHub via Bluetooth (100m range; line of sight issues) with cellular connectivity from ConHub to the cloud. Working on natively embedding cellular connectivity to their gas detection devices.

  EXO 8 launches. BLN unveiled its next generation portable area monitor, EXO 8, with first shipments expected in November. It is the only fully connected area monitor able to detect up to 8 gases and gamma radiation (more details here). BLN stated the EXO 8's gamma sensor outperforms the AreaRAE Pro (e.g., distance, detection, adverse conditions).

  Heat protection...looking to get ahead of the curve. On July 2, 2024, Occupational Safety & Health Administration (OSHA) released a long-awaited proposed rule on workplace heat safety standards. In response, BLN announced that starting next year, the G6 would measure heat/humidity and provide warnings when thresholds were exceeded, with the G7 added later.

[Aquaman11]

Thanks for the more applied tidbits on competition vs the more general narrative from the typical analysis. From the comments, Honeywell doesn't seem to be trying to respond to BLN's product advancements and appears to be losing market share ...could be poised for a buyout at some point to regain a foothold within the market segments and reposition themselves.  Same as management