Q1: 53% Revenue Growth w 71% EBITDA Growth – CRUSHED IT!!!Top line growth associated with margin expansion and run rate guidance increased. I don’t know what else you could of wanted. I thought the Logistics business was going to grow but was not expecting it to more than double! Here’s how I see it;
Revenue
Revenue up to 45.5M up 53% YoY. More importantly what blew me away was the growth in the logistics business.
Logistic revenues of 20.4M up 115% YoY, business is booming.
Profitability
Pricing environment is improving in a hurry, more importantly pricing improvement is increasing greater then the cost inflation of labour to find new drivers. You can see that in EBITDA margin. EBITDA of 5.0M up 71% YoY. Overall EBITDA margin up 100 basis points YoY.
Once again, I am going to come back to this booming Logistics business, Revenue up 2x while EBITDA of 2.1M up more than 4x. Margin expansion at work! (EBITDA margin up to 10.9% up from 5.1%). The ability for them to double their business while maintaining a steady cost structure is why I am so bulled up on the name for 2018.
Outlook
“Looking ahead, we expect market conditions to remain favorable for carriers. Continued economic growth, driver scarcity and the impact of new safety regulations will continue to contribute towards tightening capacity and create opportunities for further organic growth”
AND
“Favorable industry conditions experienced in Q1 2018 are expected to continue in the immediate term”
What I thought was wishful thinking they go a pump up the future guidance to 170M Revenue and 18M EBITDA up from 155M Revenue and 16M EBITDA. A 10% increase in Revenue and 13% in EBITDA. (Remember they just gave that last guide in March and now in May they are bumping guidance by 10%...BULLISH)
For perspective in August 2017 Guidance was 125M in Revenue 13M in EBITDA (1.25/share stock price) now estimates are 38.5% higher yet stock is 10% lower. There is almost a 50% move higher just to make up the change in fundamentals not even considering the change in growth rate that has ratchet much much higher.
With integration of Xpress Group Acquisition complete time to get back on the acquisition trail and look for their next target.
Good things happen to stocks trading at 2x EBITDA growing faster then all their peers the have no organic growth….
LONG