Aptilon Corp APTOF

Q3: 15.4% Normalized Revenue Growth w 10M in CASH!!!

[TallerCraig]

Another Solid Q as they continue to ramp internal operations for its next phase of growth. The speed at which the Cash is building up is quite impressive now up to 20% of the entire market cap of the company. Digging into the numbers:
 
Revenue
 
The CAD strength has been hitting many names this Q3 but they were able to still put up 11% YoY growth and adjusted for FX up 15.4%.  On a year to date basis Revenue up 26% YoY as they continue to grow the core business. Real seasonal business which bodes well for a big finish to the year in Q4.
 
 
Gross Margin
 
Key that GM is staying above 60%.  That was the inflection point in Q4 2016 with the shift in revenue mix to more higher margin business. Impressive that as they add people to their internal operations that they are able to maintain that margin.
 
Expenses
 
Solid bounce back after costs got a little high in Q2 as they were ramping up hiring. Seeing General & Admin back down in the 15% range of sales is back to a better level. As sales ramp continue to grow they should be able to keep this level of cost structure as 2017 as they have been bolstering internal operations. 
 
Profitability
 
A lot of noise but at the core business looking at Operating profit if you adjust for FX profitability up nicely to 954K up 23% YoY. Q4 will be huge for these guys, with Q4 2016 EBITDA representing close to 45% of annual EBITDA. 
 
Outlook

Continues to be a cash machine. Operating cashflow of 3.75M in the first 9 months and you can double that amount if you include Q4 numbers. So you have a company generating 8M in cash a year that continues to grow at a 20%+ clip.
 
On Valuation

You have to look at enterprise value here, using a 10-12x EV/EBITDA figure on my 2018 numbers I get a target price 0.85 – 1.05/share or 0.95/share at the midpoint. Multi Bagger if you get any multiple expansion!!!
 
LONG