2242749 Ont Ltd. AIIFF

scocial bank recent report

[mingzhu]

Two important things in this report:

cash flow 0.04 for 2014, but 0.79 for 2015

ebitda : 31 m in 2014, 50 million in 2015

Armtec Infrastructure Inc.

Special Situations

 (ARF-T)

 10Nov14: $0.43

 1-Year Target: $0.70 Div. (NTM): $0.00 Div. (Current): $0.00 Rating: Sector Perform

 1-Year ROR: 62.8% Yield (Current): 0.0% Risk: Speculative

Qtly EBITDA (M) (Next Release: 12-Nov-14)

 Year

 2012A $0A $18A $18A $28A $64

 2013A $0A $15A $19A $6A $40

 2014E $-8A $12A $17 $10 $31

 2015E $0 $17 $22 $10 $50

Qtly CFPS (FD)

 2012A $-0.30A $0.43A $0.37A $-0.16A $0.33

 2013A $-0.28A $0.34A $0.50A $-0.03A $0.53

 2014E $-0.60A $0.21A $0.36 $0.06 $0.03

 2015E $-0.30 $0.39 $0.61 $0.10 $0.79

 Mar Jun Sep Dec

Capitalization

Market Cap (M) $10

Net Debt + Pref. (M) $335

Enterprise Value (M) $345

Shares O/S (M) 24

Float O/S (M) 23

Control Blocks

Widely held

Financial Analysis

December-31 2009A 2010A 2011A 2012A 2013A 2014E 2015E

 09-13 13-15

Average Growth

Per-Share Data (FD)

Cash Flow $3.10 $1.30 $0.54 $0.33 $0.53 $0.03 $0.79 22.0%

Dividends $2.16 $2.16 $0.40 $0.00 $0.00 $0.00 $0.00

Book Value $14.00 $12.05 $0.64 n.m. n.m. n.m. n.m.

Shares O/S (M) 20.2 20.3 24.1 24.1 24.1 24.1 24.1 0.0%

Adj EPS $2.37 $0.29 $-2.03 $-1.06 $-0.12 $-0.47 $0.23

Valuation Ratio

Price/Cash Flow 8.2x 12.3x 3.8x 7.0x 2.4x 13.5x 0.5x 6.7

Pre-tax Cash Yield 8.5% 13.6% 19.5% 0.0% 0.0% 0.0% 0.0% 8.3%

Payout Ratio 70.4% 191.9% 153.7% 0.0% 0.0% 0.0% 0.0% 83.2%

Cash Dist./Cash Flow 0.70x 1.67x 0.74x 0.00x 0.00x 0.00x 0.00x 0.62

Price/Book 1.8x 1.3x 3.2x n.m. n.m. n.m. n.m.

Profitability

Revenues (M) $464 $463 $454 $457 $456 $468 $514 6.3%

EBITDA (M) $79 $43 $15 $64 $40 $31 $50 11.7%

EBITDA Margin 16.9% 9.3% 3.4% 14.0% 8.8% 6.6% 9.7% 10.5%

Net Income (M) $43.49 $7.91 $-269.79 $-36.11 $-2.80 $-11.22 $5.42

Net Margin 9.4% 1.7% -59.5% -7.9% -0.6% -2.4% 1.1% -11.4%

Return on Equity 17.0% 2.2% n.m. n.m. n.m. n.m. n.m.

Debt Analysis

Current Ratio 1.9x 2.4x 3.0x 2.4x 2.5x 1.8x 1.8x 2.4

Net Debt/EBITDA 2.7x 6.4x 15.4x 4.5x 7.6x 9.5x 4.4x 7.3

LTD/(LTD+Equity) 0.45x 0.53x 0.95x 1.07x 1.07x 1.11x 1.09x 0.81

Tot. Debt/(Tot.Dbt+Eq.) 0.45x 0.53x 0.95x 1.07x 1.07x 1.11x 1.09x 0.81

Capital Structure

Total Assets (M) $652 $646 $402 $362 $357 $385 $400 5.8%

Working Capital (M) $77 $103 $137 $103 $106 $91 $103 -1.3%

Long-Term Debt (M) $226 $273 $285 $295 $319 $335 $335 2.4%

Common Equity (M) $277 $245 $15 $-20 $-22 $-32 $-27

Total Capital (M) $503 $518 $300 $275 $298 $303 $308 1.7%

EV/EBITDA 9.4x 13.9x 20.0x 5.4x 8.4x 9.9x 4.6x 11.4

 

[2Greying]

Lots of numbers but really the bottom line is the company is insolvent (shares worthless). They need to "do something" to give themselves a chance....doing little or nothing is not an option! Brookfield controls the company i.e. they can't sell assets without their approval....they will likely approve as long as the proceeds go to them. As I see it....they need to work an

[Thethruthhurts]

Great advice and well expressed clear thoughts. The problem is Armtec senior management has no plan and hasn't had one for years. The rolled out the vision for 2015 two years ago. Well 2015 is a month away the only thing missing from the plan is a viable Armtec company.

[2Greying]

Thanks. Yes I agree... a new plan is required. I am not sure if the current management has the foresight and capability to develop the plan and execute. Brookfield and perhaps major shareholders need to be consulted. In the past the management felt that growing the revenues would be enough...with the existing debt level and organization structure it is obvious structural changes are necessary