CIBCEQUITY RESEARCH
October 20, 2022 Flash Research
MULLEN GROUP LTD.
Q3 First Pass: Margins Strong Across Major Segments
Key Takeaway: Positive impact. MTL reported Q3 EBITDA that was above Street expectations and our estimates. The company is hosting a conference call on October 20 at 10:00 a.m. ET.
Q3 Recap: Revenue came in at $518MM, up from $433MM the year prior
versus our estimate of $530MM (consensus $525MM). EBITDA came in at $98MM, up from $64MM the year prior (CEWS adjusted $64MM) and versus our estimate of $92MM (cons. $90MM). Adj. EPS of $0.51 was up from $0.19 the year prior and versus our estimate of $0.39 (cons. $0.38).
Divisional Recap: Below is a recap of MTL’s divisional performance.
- Specialized & Industrial Services: Within S&I, MTL reported $109MM in
revenue, up from $86MM the year prior and versus our estimate of
$102MM. The Y/Y growth was driven by $20MM of internal growth as
prices increased across all Business Units to offset higher costs due to
inflation. EBITDA came in at $25MM up from $16MM the year prior and
versus our estimate of $19MM. Margins came in at 22.6%, versus 18.2%
the year prior (CEWS adjusted was 18.3%), and compared to our
estimate of 19.1%.
- Logistics & Warehousing: Within L&W, MTL reported $156MM in
revenue, up from $122MM the year prior and versus our estimate of
$152MM. The Y/Y growth was driven by $23MM of internal growth on the
back of rate increases and demand for freight services that remained
strong. EBITDA came in at $33MM, up from $23MM the year prior and
versus our estimate of $30MM. Margins came in at 20.9%, up from
18.6% the year prior and versus our estimate of 19.5%.
- Less-than-truckload: Within LTL, the company reported $202MM in
revenue, up from $169MM the year prior and versus our estimate of
$218MM. EBITDA came in at $41MM, up from $27MM the year prior and
versus our estimate of $43MM. Margins were 20.4%, up from 15.9% the
year prior and versus our estimate of 19.5%.
- U.S. & International Logistics: Within U.S. & International Logistics, MTL
reported $55MM in revenue versus our estimate of $60MM. EBITDA
came in at $2MM, in line with our estimate and margins came in at 2.7%,
down 120 bps from our estimate.
Positive On The Rest Of 2022: MTL noted its results reflect the best
operating environment it has seen with demand for freight, logistics and
warehousing services remaining strong through year-end. That said, the
company acknowledged that future results could moderate as the economy is expected to slow.
Conference Call Details: MTL is hosting a call today at 10:00 a.m. ET. The dial-in numbers are 1-800-319-4619, 416-915-3239 and 403-351-0324.