Google Finance
Filing
July 06, 2017
Q3 2017, Year end Mar. 31.
Current Price: $0.335
1.Basic Information
(1) History
The company was founded by Emmanuel Mounouchos at 1996. It was IPOed at 2007. George Rossolatos invested and joined the company at 2010. Since then it is quite profitable and made several acquisitions. At 2015, Mounouchos was ousted with $0.5m one time payment.
(2) Business related:
The company's main business is security solutions for high end residential or commercial real estate. It is a niche market player in Toronto. The several company it acquired are all kind of related to its business. 1) Home security, it is a combine of its original Avante and the acquired LVS at 2015. This is its main business. The RMR is around $500k which equals $6m/year. 2)Home automation, This is from its INTO acquisition at 2014, seems also include security for condos. 3)Locksmith, this is from the CWL acquistion at 2016. No recurring revenue. 4) Another security based.
(3) Management.
George Rossolatos is the current CEO and the key person. He was a pretty success investment manager at private equity fund. He invested and joined the company at co-CEO at 2010 to turn the company around. At 2015, he became the sole CEO. I think he did quite a good job managing the company and made several quite successful acquisitions.
(4) Debt and Credit facility.
Currently on debt and has around $1.1m in cash
(5) Insider holding, options, Insider trading info, share buy back.
Rossolatos : He owns 6.8m shares which is around 8.5%.
(6) Employee numbers
(7) Industry comparison.
(8) Major events
2. Financial data.
3. Valuation
(1) Currently its recurring revenue RMR is just about $500k. If using 50xRMR, it worths just $25m. However, both the INTO and the CWL business are not recurring in nature. It should be added to the valuation.
(2) Currently the company just earn 10% EBITDA which is around $2m/year. Assuming $0.5m CapX. It is real earning is around $1.5m. Current $26m market cap is not too bad.
(3) If it can grow its revenue to $25m level and bring EBITDA to $2.5m. Then it will be more attractive.
4. Risk
(1) Real estate slowdown might affect some part of its business like the condo or the locksmith.
5. Conclusion
It is quite a fair price at current profit level. If the company can continue to grow revenue and maintains the EBITDA margin, it can be a good one.
6.Links
https://www.linkedin.com/in/rossolatos/
http://www.riverdalecapital.com/
http://vimeo.com/37351819
https://twitter.com/rossolatos
