RE:FinancialsI agree. Here are the comments I posted on another forum:
- Revenue rose 81% to $23.82M
- Net income up 64% to $4.03M. Only normal the net income growth rate isn't tracking the revenue growth rate because they didn't pay taxes last year and their first dividend payed last year was recorded in calendar year 2014 ($436k).
- Inventory up from 2.14M (2013) to $4.16M, mostly growth in raw materials. This suggests revenues in the coming quarters should rise significantly.
- 9 cents EPS. 11 cents if adjusted for forex loss (not a real loss in this case), and uplisting fees for TSX and AMEX.
- Almost $10M in cash
- EBITDA up 159% to $6.45M
It's impressive that they had a ~$1M sequential growth in revenue despite tanker car orders being delayed. Once the retrofits standards become finalized, revenue should shoot up as we all expect. Management will surely raise the dividend as they stated in the MD&A that: "our overall focus is the growth of earnings, dividends and corporate value on behalf of Kelso’s shareholders". Logically, I'm thinking the dividend this year will be 2-3 cents.
Most important parts of the MD&A:
"Recently the rail tank car manufacturers (OEM) have announced record backlog orders for new tank cars that will require 2 to 3 years to complete. Kelso is expected to benefit from these new orders as well as the anticipated mandatory retrofit of existing tank cars"
"There are additional factors that are expected to impact our future business performance. The timing of AAR approvals and subsequent customer adoption of our new products are expected to improve the rates of our revenue growth. A rapid influx of product orders could develop as customers comply with the mandatory retrofit schedules of PHMSA"
"Looking forward to 2015 we have positioned the Company to capitalize on all potential demand for rail tank car equipment anticipated to occur over the next ten years"
Management is clearly stating they anticipate the revenue growth rate to improve, and that they think they can grow rail road products revenues for the next 10 years. Very hard to find companies of this size growing at this rate, and accelerating their growth. I don't think it will be too long till Kelso becomes a billion dollar company.