Disclosure:The author is long LGLTF.
Summary
- Yesterday morning, Loyalist Group announced record earnings - $19.6 million revenue (93% increase Y/Y), with an adjusted EBITDA of $3.6 million (50% increase Y/Y) and an adjusted EBITDA margin of 18.6%.
- On November 17th, the company entered into a new $18.5 million credit facility to fund its aggressive growth and acquisition ("roll-up") program.
- Previously, Loyalist had raised only equity capital to fund acquisitions - the new credit facility signifies a new phase in the maturation of the company.
- On November 24th, Loyalist announced that it is acquiring the largest student recruiting agency in South Korea, Uhak.
- Momentum has been building, and the stock may break out to a new all-time high on the heels of third-quarter earnings and announcement of further strategic acquisitions.
The team over at Loyalist Group Ltd. (OTC:LGLTF) has been very busy since the school year began in September. In particular, since my last article -Loyalist Group Ltd. - Globalism, Language, and Value Investing Presents An Under-Appreciated Education Roll-up Story- the company has issued 4 press releases which materially affect its business. These include: securing a new credit facility, the engagement of a capital markets firm, another strategic acquisition, and just yesterday its third-quarter earnings were released.
Given everything that has happened, I've now reviewed the information, analyzed the new numbers, and haverevised my price target upwards to $1.05 per share.Momentum has been building, and I feel that shareholders are on the verge of experiencing a breakout given yesterday's earnings announcement. I look at any pullback here as being short-lived and a buying opportunity.
Record Third-Quarter Earnings
On Wednesday, November 26th, Loyalist Group announced the financial results for the three and nine months ended September 30th, 2014.
Third-quarter revenue for the three months ended September 30, 2014 was a record $19.6 million, an increase of 93% over the same period in 2013. Income from operations was $3.2 million, a 43% increase over the same period in 2013, while net income was $1.9 million, an increase of 14% over the same period in 2013. Adjusted EBITDA was $3.6 million, an increase of 50% over the same period in 2013, and the Adjusted EBITDA margin was 18.6%.
Read more:https://seekingalpha.com/article/2717195-loyalist-group-ltd-continues-its-aggressive-growth-and-announces-record-earnings