Scotia analyst commentary Recent Update Text as of 13NOV14
. Exchange reported Q3 results that came in above our estimates: EBITDA (from
continuing operations) came in at $27.9 million vs. our adjusted estimate of
$26.2 million.
. The company raised its monthly dividend 4% to $0.145/share (now $1.74/share per
year).
. Results came in above expectations at both Aviation and Manufacturing. Aviation
results were largely driven by Regional One (EBITDA up 136%), which benefited
from increased investment, and Calm Air (EBITDA up 45%), which benefited from
restructuring initiatives.
. With the dividend increase, we still forecast only a 60% payout ratio in 2015,
which is at the low end of the company's targeted range. As the business grows
and profitability improves (including contribution from the PAL acquisition), we
believe we could see additional dividend increases in 2015.
. We have made modest changes to our estimates. Our $28/share one-year target is
unchanged.
. With manageable leverage ratios (and access to additional capital), an 8.0%
yield (with upside), and attractive valuation - shares trading at 6.2x EV/EBITDA
on our 2015E vs. its historical trading average of 7.0x (NTM) - we remain buyers