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Quarterhill Inc T.QTRH

Alternate Symbol(s):  T.QTRH.DB | QTRHF

Quarterhill Inc. is a Canada-based company, which is engaged in providing tolling and enforcement solutions in the Intelligent Transportation System (ITS) industry. The Company provides end-to-end mobility systems to some of the tolling authorities in the United States, including in Texas, California and Illinois through Electronic Transaction Consultants, LLC (ETC). ETC’s core products comprise the riteSuite platform, a scalable and customizable cloud-based tolling and mobility solution. The platform has applications for the roadside and back office, with strengths in vehicle identification, tracking, dynamic pricing and interoperability amongst agencies. The Company’s wholly owned subsidiary is International Road Dynamics Inc. (IRD), is a multi-discipline, technology company and provider of Intelligent Transportation Systems. It provides integrate ITS technologies into systems designed to solve and challenging transportation problems.


TSX:QTRH - Post by User

Comment by v_guerrieroon Jul 18, 2022 10:40pm
180 Views
Post# 34833170

RE:RE:RE:RE:RE:RE:Dividend Maintained?

RE:RE:RE:RE:RE:RE:Dividend Maintained?

Except, one big thing, ETC is a sub scale ITS company vs Transcore, Conduent,  etc.  Some of these at scale players have 10-20X the R&D budget and don't have to finance litigation campaigns and losses for an IP subsidiary.  

Any sign of success from ETC will lead to competitive responses.  

You can look at the facts of the ITS business.  It doesn't produce cash flow.  It requires significant upkeep and maintenance and investment to keep its business modern.  Inventories need financing and they need cash buffers for cost overruns.  

They can make up all of their excuses and use EBITDA measures.  But EBITDA hides these issues that show up in the cash flow statements.  

Selling WiLan will give them more cash to drain.  Then they have to gut the corporate structure to help keep the dividend going.  When you see that announcement, it is just to pay for the dividend as cutting it from these levels would make it the pariah of the TSX pariah firms.  

I think they will try everything to turn the annual cash flow situation around before cutting the dividend.  That includes cutting the corporate structure and issuing dilutive equity to buy a cash flow producing company.  

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