Velan Inc T.VLN

New CFO

[BuffetsProdigy]

https://www.globenewswire.com/news-release/2021/05/03/2221691/0/en/Velan-Inc-Announces-the-Appointment-of-Benoit-Alain-as-Special-Advisor-to-the-Chief-Executive-Officer-He-Will-Assume-the-Position-of-Chief-Financial-Officer-on-June-1-2021.html

"Benoit will assume leadership of Velan’s global finance department, bringing along his complete finance and business leadership experience, which includes having carried out multiple M&A transactions throughout his career."

Perhaps I'm reading too much into that quote...but it seems they may be looking at strategic alternatives

[knicksman]

I'm really excited to see the next quarter. Feels like the set up is perfect for a breakout quarter.  Gross margins are improving just as volumes return.  Sucessful restructuring + the highest backlog since 2012... Trades at 4x EV/EBITDA and 0.6x P/B...makes no sense.  Should be >$14 after one or two decent quarters.  Nice thing that the next two quarters will be

[MeanReverting]

Supposed to be released today...taking a while...

[knicksman]

Well the results are out. I guess we have to wait one more quarter to see the results we want. No real positive surprises here. Backlog/cost rationalization should lead to several good quarters...and presumable MRO comes back too at some point. 

[knicksman]

You would have to think, based on the company's backlog, that F2022 sales should exceed $400 million (mayb $450 million). EBITDA should be way up next year. And, maybe this sleepy company does something with the cash.  All the levers are there to "create" value for shareholders. They just need to stop being so sleepy...

[knicksman]

Just running some quick math.    Backlog is $560 million. Let's assume revenues of $450 million x GM% of 26% - SG&A of $90 million + D&A of $12 million.    That gets you to EBITDA of about $40 million. Into C$ that's $50 million. That compares to an EV of $165 million.  This trades at just above 3x EV/EBITDA on forward numbers...if they can

[Mrguillaume]

Listening to the cc I heard a few headwinds remaining. COVID cases in India are hampering manufacturing, supply constraints, V20 NA re-org still not efficient, steel costs and transportation issues. I've owned this for 3+ years and keep thinking "next q, next q". Lots of upside on a buyout - $20+ but until then Velan is the definition of a value trap.