RE:Questions for CEOBuyNMonitor, the backlog is a very important metric, as your post indicates. This the definition of backlog in QTRH's reporting: We use the non-IFRS measure "backlog" to mean the total value of work that has not yet been completed but that in management's experience of similar situations has: (a) a high certainty of being performed pursuant to existing contracts or work orders specifying job scope, value and timing; (b) an expectation of expansion of existing contracts due to expected extensions; and/or (c) been awarded to one or more of our ITS operating subsidiaries as evidenced by a binding contract or where the finalization of a binding contract is reasonably assured. Activities under such contracts may cover a period of up to 15 years. We do not include in "backlog", the value of any expected but unsigned change orders that management considers may apply to such contracts.
It is important to understand the significance of the highlighted portion. When QTRH acquired ETC, prior experience at ETC was that change orders represented ~7.5x the original contract value during the term of the contract. The range was quite broad, but the low end was ~3.5x. Other ITS companies talk a similar story. An important question for the current management would be to ask if they subscribe to a mutiplier effect and if so what would an reasonable range be? Maybe homework can provide some color here.