Exchange Income Corp T.EIF

Alternate Symbol(s): EIFZF | T.EIF.DB.L | T.EIF.DB.M | T.EIF.DB.K

Industrials Airlines

Exchange Income Corporation is a Canada-based diversified acquisition-oriented company. The Company operates through two segments: Aerospace & Aviation and Manufacturing. The Aerospace & Aviation segment is comprised of three lines of business: Essential Air Services, Aerospace, and Aircraft Sales & Leasing. Its Essential Air Services includes both fixed wing and rotary wing operations. Aerospace includes its vertically integrated aerospace offerings that provide customized and integrated special mission aircraft solutions primarily to governments across the globe. Aircraft Sales & Leasing includes aftermarket aircraft, engine and parts sales and aircraft and engine leasing, along with aircraft management services. The Manufacturing segment is comprised of three lines of business: Environmental Access Solutions, Multi-Storey Window Solutions and Precision Manufacturing & Engineering. The Company also focuses on portable hydronic (glycol-based) climate-controlled equipment.

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Exchange Income Corp

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Post by retiredcfon Aug 13, 2021 8:45am

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Post# 33699741

TD

This is a flash report so there's some potential for them to raise their current $53 target. GLTA

Exchange Income Corp.

(EIF-T) C$42.23

Q2/21 First Look Event

After market close on August 12, Exchange reported Q2/21 EBITDA of $81.1 million vs. TD/consensus of $75.1 million/$75.6 million. Adjusted diluted EPS was $0.52 vs. TD/consensus of $0.47/$0.48.

Impact: SLIGHTLY POSITIVE

The stronger-than-expected Q2/21 results were driven by revenue in both segments and Aerospace & Aviation margins. We view this as an encouraging signal that Exchange's aviation exposure is relatively well insulated from the impact of the pandemic and recovering more quickly than expected. Relative to Q2/19, Exchange's EBITDA is down a modest 7%, FCF (maintenance capex) is up 6%, and its debt-to-EBITDA is down by 5%. Exchange's results once again demonstrate the resiliency of its diversified business.

Liquidity: $900 million at quarter-end, including cash of $43 million. We believe that this liquidity is sufficient not only for any renewed COVID-19 impact, but also to invest in new opportunities.
FCF (EIC def'n): $36.5 million compared with our forecast of $28.7 million. FCF, including all capex and working capital, was usage of $15.2 million vs. our estimate of +$9.8 million. The difference was primarily driven by higher-than-expected working capital requirements and higher-than-expected capex.

Aerospace & Aviation: Revenue increased 41.5% y/y to $198 million (TD: $184 million), with growth reflecting very challenging y/y comps for aviation due to the pandemic. Regional One revenue increased 29% y/y to $37.7 million, in line with our $37.3-million forecast. Revenue in the Legacy Airlines and Provincial increased 45%. The EBITDA margin of 34.6% was above our forecast of 30.5%, resulting in EBITDA of $68.6 million (TD: $56.2 million).

Manufacturing: Revenue increased 19.6% to $124 million (TD: $120 million). The growth was driven largely by the acquisition of WIS, which closed in Q3/20. The EBITDA margin of 15.9% was below our forecast of 20.3%, resulting in EBITDA of $19.7 million (TD: $24.4 million). A lower CEWS benefit accounted for the EBITDA decline y/y.

2021 outlook: No formal guidance for 2021 was provided due to pandemic uncertainty, although management expects a continued recovery in many key end- markets, notably in aerospace and aviation. Quest is grappling with challenges related to construction project deferrals, but the longer-term outlook remains encouraging.