D-Box is proving its business can work, says Industrial Alliance

Industrial Alliance analyst Steve Lie says D-Box’s (D-Box Technologies Stock Quote, Chart, News: TSXV:DBO) most recent numbers exceeded his expectations.

Yesterday, the company reported its Q4 and fiscal 2013 financial results. For the year, the company lost $2.57-million on revenue of $14.25-million, which was up 60% over the $8.83-million topline the company reported in fiscal 2012. D-Box’s fourth quarter saw it lose $508,000 on revenue that came in at $3.6-million, up 39% over the same period last year.

CEO Claude McMaster said the company was more than on track.

“Our financial results are progressing quickly while we continue our inroads in the entertainment and industrial markets,” he said. “Given these results, I can only be very optimistic with respect to D-Box’s future.”

Li says that both the Commercial Theatre and OEM segments of D-Box’s business exceeded his expectations. He is particularly pleased with the growth in the number of complexes that have more than one screen outfitted with the company’s motion seats, a number that has nearly doubled in a year, to 21. He expects the positive trends will continue, noting that the D-Box has secured 28 theatrical releases in 2013, compared to 22 for all of 2012, including five of the top six blockbusters.

In a research update to clients yesterday Li reiterated his 12-month target price of $1.00 and the Speculative Buy rating.

Li notes that while D-Box is beginning to prove that its core business can be profitable, the company has several avenues it can pursue in the future. He points to recent contracts with John Deere and WMS gaming a sign of the company’s diversity, and to management’s stated intent to develop its industrial virtual training technology as a signal that they are thinking ahead. He says the applications for D-Box in the industrial sector are “endless”.

At press time, shares of D-Box were up 2.2% to $0.23.