Current guidance(goes back to last year obviously)is for $21mm in EBIT this year.The 2 'live' RC facilities will kick in 1/3 of that number or $7mm. Is it reasonable to assume only 4 or so more facilities go live early this year supporting that $21mm run rate? I know RC live events will primarily be 2012 q3/q4 and into '13 events,but current guidance strikes me as ultra-conservative,not to mention the ultra conservative 10 multiple on such!Our first commercial DSI sales are imminent not to mention ACI system sales w/i 60 days. I see why Baird pushed the envelope a bit to $27(s/b $30,imo). Going live ASAP following monetization of the 24 RC facilities seems in the interests of EVERYONE...ADES,NexGen,Goldman and the UTE(immediate tax credit upon usage).
I don't think a 10x EBIT multiple is cheap...in fact, it is a little steep by comparable standards.
What it does not account for, though, is the likely EBIT growth rate ($20MM to $50MM from '12 to '13), and the option value on all of the non-RC businesses.
Basically, I am treating RC as an annuity (though we need to determine if there is terminal value or if ADES will participate past the 10-year tax credit life), and the rest is highly speculative aggressive growth.