In about another 40 days they will have the record date for the next $.11 dividend. Seems curious anyone would just throw away $.11??
Each company has a different definition of bookings, but for EVOL it is:
"Bookings are defined as sales orders expected to be recognized as revenue during the following 12 months."
This covers both licenses and services.
Your broker is quicker on the credits than Schwab, who waited till 4 hours after the market closed before mine was showing up; however, no matter, as you point out, we "double dip" for the $.22 if bought early enough.
The buyer should go to the institutional desk of his broker and see if they can line up a cross with a motivated seller who might have that large of a position.
They will pay their dividend around 4/1 to shareholders of record 3/28 (due to intervening weekend, that would imply to shareholders who bought by 3/23). They SHOULD pay another dividend around 6/1 (which will be announced with their Q1 report). Thus a new shareholder will have a $.22 "cushion" against their purchase price within around 67 days of their purchase on 3/23.
1.) Will be moving part of their business towards a service contract model which smooths revenues over longer period of time rather than taking one up-front fee; but presumably MORE total revenues and clearly less "lumpiness"
2.) As prior posts noted, they will be taking $1mm charge in Q1, but that, combined with the $533k charge in Q4 will ultimately save $3.5mm pre-tax and based on one of the analyst's questions, most of that will fall to the bottom line.
3.) New term loan is at prime + 1% which currently is 4.5%; clearly a very favorable borrowing rate.
4.) Their projections for the future, combined with the terms of the loan leave them, IN THE OPINION of the CFO, capable of continuing the dividend (that is no guarantee, but it is comforting!)
5.) COO seemed to feel that 100% revenue growth over the next five years was feasible. My calcs say that if they can generate 100% revenue growth, they can generate MUCH higher bottom line growth
6.) Also, as prior posts noted, tax rate was projected as being lower in the future. My comment is that the NOLs from 6thSense would not be the primary ingredient in that, as due to change of control regulations, the use of those NOLs would be around a maximum of $300k/year going forward.
Reasons for weakness:
1.) As you duly noted, quarter will probably be a "clear the decks" and not show much organic revenue lift. Many may not look past that when the earnings are released to then look at backlog and bookings, as well as management's comments during the CC.
2.) Concern that 1.) above, combined with new loan agreement may have them dramatically cut the dividend in the short term.
I think micro-caps in general have grossly underperformed the market since it became "shaky" during last summer. EVOL's performance will be much more driven by their performance on a current basis as well as their bookings/backlog which are strong indicators of their future performance. The simplicity and transparency of their business and their financial reporting provide one with a lot of confidence if their outlook is positive.
They filed an 8-k which details a new credit agreement. Based on my reading they are getting a term loan for $6mm with monthly p & i repayments to start 1/1/2017 for 3 years till 1/1/2020.
HOWEVER they must repay their TWO $5mm revolvers with the same bank. Thus their cash balance will go down by around $4mm in the short term. There are also restrictive covenants. One of them which relates to leverage uses quarterly EBITDA and one which relates to "minimum fixed charge coverage ratio" uses trailing twelve month EBITDA. What is quite interesting is the last sentence in the following clause:
"“EBITDA” means with respect to any fiscal period an amount equal to the sum of consolidated earnings before interest, taxes, depreciation and amortization, stock compensation, foreign exchange gains or losses, and non-cash gains or losses. For purposes of calculating financial covenants, the following are permitted to be added back to consolidated EBITDA: $696,000 in second quarter 2015, $711,000 in third quarter 2015, $533,000 in fourth quarter 2015 and up to $1,000,000 in first quarter 2016."
This might imply that Q1 2016 could be soft?? Also, as I still feel that they may change their dividend policy to align more with their earnings performance over the near term. fwiw
I will take a shot: $7.3mm Revenue, $1.4mm Operating Income, $700k in FX and Restructuring charges for $700k Pre-tax, $550 After Tax $.05/share and nice growth in bookings and backlog with very upbeat guidance for 2016. Dividend is a "wild card" and they COULD change from fixed amount to a percent of After Tax Income going forward. This would lower dividend in the short run but ultimately increase the dividend as they grow and operations improve. jmho
Could be that the late December buy frenzy related to their liking what they expected for 2016 and not anything stronger than that.