Independent analysis Balance Sheet:
Current ratio of 4.4 with over $102M in cash, $31M in receivables over only $30.8M in short term liabilities. $3.8M in long term debt at good terms. Very strong.
Cash Flow:
Generated $19.7M in free cash flow during 2021 via operations, slightly up from the $19.4M it generated in 2020. In June, raised significant capital of over $69M at $12.25 a share (trades just over $3 today). Paid off some debt in the year as well and overall increased their cash position by over $76M during the year. It's an incredible amount of cash on hand for a company that has also generated $40M of FCF over the past two years. Will be interesting to see how they utilize it, would assume they would be pursuing some acquisitions, or potential share buy backs when the SP is down at this level?
Share Capital:
- 60.7M shares outstanding, with 13% dilution during 2021 which provided them with $69M in cash.
- 15% Omnibus plan, which for a company of this size, is way f*cking offside IMO.
- 9% insider and 19% institutionally owned.
- 1.1M outstanding options
Income Statement:
Revenue grew during the year by 16.3% to just over $122M with double digit gains in both their managed and self service businesses.
Increased their gross margin by about 50bp, finishing at 52.1% vs 51.6% last year.
Total expense grew by 15%, at a better rate than their revenue increase and that is including $4.3M in more non cash burning share based compensation. With that removed, total expenses only rose by 5.8% to drive revenues of three times that rate. That's excellent conversion.
Income from operations grew by 34%, more than double the rate of their sales increase.
Overall:
Stock is down 12% mostly because they missed some analyst estimates including Zacks. I suggest F Zack's and look at the actual big picture numbers. They grew their revenue, improved their margin and FCF, had excellent conversion on their expenses, and are sitting on fat stacks, that I'd love to hear more about how they plan to utilize. Stock has been beaten down like a rented mule this year. Is it worth the $12 it was trading at in the summer? No, but just over $3 looks pretty good to me. I'm grabbing a starter position before the closing bell today and we'll see what happens. 4 stars.
https://wolfofoakville.com/fins-reviews/f/acuityads-holdings-atto-45-stars