bsm

A slate of new customer wins has Clarus Securities analyst Noel Atkinson feeling optimistic about BSM Technologies (BSM Technologies Stock Quote, Chart, News: TSXV:GPS). On Monday, BSM Technologies reported its Q3, 2016 results. The company lost $161,000 on revenue of $13.1-million, up 70.1 per cent from the $7.7-million topline the company posted in the same period last year. "We delivered solid adjusted EBITDA as well as adjusted EBITDA margin improvement in the quarter, reflecting the benefits of cost synergies and overall disciplined expense management," said CEO Aly Rahemtulla. "While seasonality in our government vertical and foreign exchange headwinds placed some pressure on top-line results, we exited the quarter with an improved pipeline. We achieved almost $4-million in annualized cost synergies in the quarter, keeping us on track with our target of delivering $4.0-million to $5.0-million within the first 18 months following the merger with Webtech. Our outlook for the remainder of fiscal 2016 is unchanged. We remain focused on integrating the two businesses and refining our go-to-market strategy. Looking to fiscal 2017, we continue to expect some quarter-to-quarter variability in our results, but are confident in our ability to deliver top-line growth and increase profitability for the year." Atkinson says BSM's third quarter results were in-line with his expectations, but the real news was gleaned from the Q3 conference call, in which management announced it had won several orders in rail, construction and government verticals. "These appear to be successful transitions after long-term pilots, and are the first major orders announced in at least several quarters," he says. "The wins include a new U.S. Class I railroad customer for BSM’s support vehicle fleet management and driver compliance solutions, a global construction company, and several orders in the government segment. We believe the rail order could be for several thousand units, while management noted the construction customer has already seen quite meaningful orders so far in Q4 and could eventually grow to over 10,000 units in the field. We expect these orders to start meaningfully contributing to revenues in FY2017." In a research update to clients today, Atkinson maintained his "Buy" rating on BSM Technologies, but raised his one-year price target on the stock from $2.00 to $2.50. Atkinson thinks BSM will generate Adjusted EBITDA of $7.8-million on revenue of $57.4-million in fiscal 2016, numbers he expects will rise to EBITDA of $11.3-million on a topline of $62.9-million the following year. The analyst explains that he arrives at his new target by updating his 2016 and 2017 estimates and introducing his 2018 forecast. That year, Atkinson expects BSM will generate Adjusted EBITDA of $14.7-million on revenue of $74.1-million. More Cantech Analysts

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