RE:RE:RE:RE:RE:Q3 Numbers ReleasedQ3 is showing signs of a turnaround, but I'm not confident the company will grow all that much in FY2019 according to their MD&A.
From their MD&A:
(1) "Based on these new-build predictions and our historic retrofit/repair business Kelso expects to supply its specialized tank car equipment to over 8,000 tank cars in 2018 and over 10,000 tank cars in 2019. Depending on the makeup of customers’ specifications and the status of our AAR approvals sales can range from $1,400 to $10,000 per tank car"
(2) "The Company continues to finish AAR approvals for our ceramic ball BOV, pressure car PRV and angle valve although the process could take two years to finish."
(3) "Most products are near completion and ready for market distribution commencing in 2018"
If they're going to sell product for 8,00 tank cars this year and revs will be $8.5M (Q1-Q3) + $4 (Estimated Q4), then we can conclude they make ~$1,500/tanker car. Given that their other tanker car products will take up 2 more years to be AAR approved, I wouldn't expect the averag rev per tanker car to increase in 2019. By that logic, if they equip 10,000 tanker cars in FY2019, revs will only grow 25% YoY. It's possible their estimate of the number of tanker cars they'll equip for FY2019 is conservative, but management has usually been accurate witht the info they state in the MD&A, contratry to what they shareholders over the phone (from my own experience).
It's also possible revs get a boost from the new diversied product lines, which should be ready for market distribution sometime in 2018 as indicated in point (3). I do not believe revs from these new products will be significant in FY2019 since it usually takes time to gain traction for any product, especially since the products are part of new markets the company has never sold in.
Disclosure: no position yet, watching from the sidelines.