Enercare, Inc. CSUWF

Industrials Rental & Leasing Services

"EnerCare Inc is a provider of essential home and commercial services and energy solutions. The company offers rental services of water heaters, water treatment, furnaces, air conditioners, and other HVAC rental products. EnerCare is also in the business of plumbing, protection plans, and related services. The company operates in Canada and the United States of America."

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Enercare, Inc.

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Post by retiredcfon Nov 14, 2017 8:43am

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Post# 26957637

TD

Maintain their $23.00 target. GLTA

Enercare Inc.

(ECI-T) C$19.42

Q3/17 First Look Event

Enercare reported Q3/17 revenue of $325.9mm (up 3.2% y/y), versus our estimate of $322.8mm and consensus of $330.1mm.
Adjusted EBITDA for the quarter was $78.1mm (down 1.9% y/y), versus our estimate of $81.9mm and consensus of $80.5mm.
10:00 a.m. ET conference call (647-427-2311 or 1-866-521-4909).

Impact: NEUTRAL

Revenue in the quarter came in slightly ahead of our forecast as slightly lower- than-forecasted Home Services revenue ($114.9mm versus $116.3mm estimate) was offset by slightly higher than forecasted Service Experts revenue ($176.1mm versus $173.7mm estimate) and higher-than-forecasted flow-through commodity charges. Adjusted EBITDA fell short of our forecast as the higher-than-anticipated revenue was more than offset by higher-than-expected selling costs and a ~ $1-2mm impact by cooler weather y/y.
Enercare added 9,800 units to its Home Services portfolio in the quarter (up 3% y/y) versus 6,800 units lost to attrition (down 1% y/y), resulting in net growth of 3,000 units in Q3/17. The company also added 2,000 net protection plans in the quarter (0.4% y/y net unit growth). HVAC originations (excluding Service Experts) in Q3/17 decreased by 12% y/y, which the company attributed to cooler weather relative to Q3/16 driving lower demand for air conditioning sales and rentals.
At Service Experts, HVAC originations in Q3/17 increased by 12% y/y, with a 9% increase in sales and 642 new rentals added in the quarter despite cooler weather y/y and softer demand in Florida in the lead-up to Hurricane Irma. Additionally, rental mix appears to be relatively in line with recent quarters. The company provided no update on its plans for further U.S. roll-out of HVAC rentals, but has increased its synergy guidance to $0.08-$0.11 per share (from $0.05-$0.08 per share previously) as it has already generated $0.07 per share YTD (primarily improved sourcing costs).
In Sub-metering, contracted units increased by 8% y/y in Q3/17, installed units increased by 12% y/y, and billable units increased by 12% y/y. Enercare continues to roll out its commercial sub-metering program, having signed 8 customers to date (targeting 15 by year-end).