Google Finance
Filing
Mar. 09, 2017
Q2 2017
Current Price: $8.9
1.Basic Information
(1) History
The company was founded by at 1984. Originally it just produce Daytime Running Light for vehicles. Gradually it switch to Electric Control Board and Wire Harness etc. After 2010 it focus on LED lightning and thus now is its major business.
Its business is kind of sluggish until 2014 when its LED business started to boom.
(2) Business related:
LED lighting: Count for over 70% of revenue and pretty new. Its multi-color ambient lighting seems its main compelling product.
Electric Control Board and Wire Harness: 30% and old revenue stream.
(3) Management.
STUART ROSS is the founder and the CEO of the company.
(4) Debt and Credit facility.
$5m debt. Not that much.
(5) Insider holding, options, Insider trading info, share buy back.
(7) Auditor
(8) Industry comparison.
Just like Exco, the company is the also belongs to the Auto parts industry. Its hard to find who is their real competitor and how big the market is. It seems to be a new technique compare to the old lighting system in cars and it does looks cooler. If the price is good, eventually all car OEM will switch to LED lighting system.
(9) Major events
2. Financial data.
3. Valuation
(1) The company report pretty bad Q1 and Q2 2017 which see revenue slide and big drop on income, the underline reason for income drop is an one time dev expense which I believe is for the Tesla model 3 and currency exchange. Besides the small drop on revenue, there is not much changed. Also indicated in MD&A, the company booked over $100m/year revenue for next several years. I think unless there is big changes from its customer, then the revenue stream should be quite reliable.
(2) Assume it can achieve around $12m EBIDTA, $2m for depreciation and $2m for R&D. 25% tax rate, it should be able to generate $6m annual income which makes current P/E at 10 at $60m market cap.
4. Risk
(1) If the auto industry slows down, then it would got hit for sure.
(2) It relies on several major customers like Ford.
(3) As Exco, the Trump's policy on Mexico importing might affect the company as well.
5. Conclusion
Overall the business is fairly good although not much is known about the management. Current price is acceptable but not very cheap.
STUART ROSS is the founder and the CEO of the company.
(4) Debt and Credit facility.
$5m debt. Not that much.
(5) Insider holding, options, Insider trading info, share buy back.
CEO holds 1M shares, around 15%.
Insider hold around 30%?
Options outstanding around 300K. Warrants around 700k.
(6) Employee numbers
Around 1000 employees, 800 in Mexico, 200 in Canada.Insider hold around 30%?
Options outstanding around 300K. Warrants around 700k.
(6) Employee numbers
(7) Auditor
(8) Industry comparison.
Just like Exco, the company is the also belongs to the Auto parts industry. Its hard to find who is their real competitor and how big the market is. It seems to be a new technique compare to the old lighting system in cars and it does looks cooler. If the price is good, eventually all car OEM will switch to LED lighting system.
(9) Major events
3. Valuation
(1) The company report pretty bad Q1 and Q2 2017 which see revenue slide and big drop on income, the underline reason for income drop is an one time dev expense which I believe is for the Tesla model 3 and currency exchange. Besides the small drop on revenue, there is not much changed. Also indicated in MD&A, the company booked over $100m/year revenue for next several years. I think unless there is big changes from its customer, then the revenue stream should be quite reliable.
(2) Assume it can achieve around $12m EBIDTA, $2m for depreciation and $2m for R&D. 25% tax rate, it should be able to generate $6m annual income which makes current P/E at 10 at $60m market cap.
4. Risk
(1) If the auto industry slows down, then it would got hit for sure.
(2) It relies on several major customers like Ford.
(3) As Exco, the Trump's policy on Mexico importing might affect the company as well.
5. Conclusion
Overall the business is fairly good although not much is known about the management. Current price is acceptable but not very cheap.
6.Links
May. 15, 2017
Price: $9.50
Q3 2017 Data.
(1) Revenue $92m. EBIDTA close to 5M. Net income 2.8m.
(2) It seems the $6m annual income is quite conservative while the share outstanding should be 7.8m instead of 6.8m because of the warrants and options. So use $120m annual income, using 13% EBITDA, it should be able to generate $16m annual EBITDA, using $2m CapX, $2m R&D, 25% tax. It should generate $8m annual income.
May. 15, 2017
Price: $9.50
Q3 2017 Data.
(1) Revenue $92m. EBIDTA close to 5M. Net income 2.8m.
(2) It seems the $6m annual income is quite conservative while the share outstanding should be 7.8m instead of 6.8m because of the warrants and options. So use $120m annual income, using 13% EBITDA, it should be able to generate $16m annual EBITDA, using $2m CapX, $2m R&D, 25% tax. It should generate $8m annual income.
