Revenue and EPS Growth with Expanding EBITDA Margins…Late to this story but these numbers looked really impressive. The streamlining of its core business has driven three straight quarters of positive EPS and significant debt reduction on margin expansion.
Looking at Q4 results Revenue up 14.3% on EPS of 0.07 a share more importantly adjusted EBITDA of 6.1M up 38% on expanding EBITDA margins. Diving into the segmented revenue the Asia growth remains real impressive up 57% YoY which will continue to be a growth driver going forward.
The order Backlog remains robust down (7)% QoQ but still up 2.8% YoY. Keep in mind as well the 21M in contract awards announced on May 12 that is not included in the figure so I conclude demand remains strong.
With regards to the energy business, this has been highlighted by management as a headwind but I believe management is giving itself room to beat. Given the fact that during this quarter energy cratered down into the 20s and the Energy Order bookings remained stable, this is a testament to the strength of the business. They brought this up again in their outlook going forward about the pressure on the global energy market but since the Q energy is up 100% back to 50s. This creates areas for revenue growth going forward as cap ex of energy companies pick up again and you begin lapping these low prices in the Qs to come.
Last thing is on cashflow, in 2016 they generated 0.51 a share in cash this creates so much optionality for management to continue to pay down debt of invest in future growth now that the vision and direction of management is focused on its core competencies.
Clearly I have missed this one from the lows of late last year but looking back to 2014 when the stock was north of 4.5. Just getting back to that level is more than a double combined with the fact concerns about water safety and quality aren’t going away any time soon. Now that Ovivo has demonstrated the ability to put up positive EPS you should see valuation expansion as well as EPS growth. Time to bite the bullet tomorrow and buy this gem before it gets any farther away from me.