KGIC Inc LGLTF

Thoughts

[jumpth3shark]

Revenue was a little lower than I had anticipated but I neglected to compare to historic Q4 results and only extrapolated after the acquisition (the company mentioned had they gone all year with the acquisitions, 2013 would have generated $54 million in revenue. Britishcinnamon also pointed out the poor macroeconomic conditions at the time (and still now), coupled with historically low consumer spending contributed to the lower revenue figure. That being said, Loyalist still set record numbers with most of the expenses affecting the bottom line being one-time acquisition related costs. Factor in the new franchising and licensing opportunities, very low-risk recurring revenue models, and the the new student housing division, and during 2014 Loyalist can drastically improve its margins and experience healthy organic growth. The housing division in particular excites me the most because housing has the potential to be a multi-million dollar opportunity for Loyalist. Housing is an absolute necessary for international students, and most students want the opportunity to have the full package at the school of their choosing. Look at any university or college, they all have dorms. Housing is a very high margin business model that will affect the EBITDA in 2014 in a very positive way.

As for the sell-off today. Thanks to the sellers for giving us longs, those who truly understand and appreciate Loyalist, an opportunity to get more shares. I also added some into my TFSA today. I have so many already but can't resist at these levels.