Author: cpatches

Noble Capital Markets Research Report Friday, December 20, 2024

Companies contained in today’s report:

Great Lakes Dredge & Dock (GLDD)/OUTPERFORM – $182 Million of Awarded Work
Steelcase (SCS)/OUTPERFORM – Reports Third Quarter Results

Great Lakes Dredge & Dock (GLDD/$11.55 | Price Target: $14)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
$182 Million of Awarded Work
Rating: OUTPERFORM

Awarded Work. Great Lakes announced an additional $182 million of awarded work across four projects. The new projects were part of the $465 million of low bids and options pending as of the end of the third quarter. The new awards will add to a record backlog of work for 2025 and are likely to keep Great Lakes’ fleet fully engaged during the year. The projects are all for coastal protection.

Projects. Ocean City Beach Renourishment in New Jersey is valued at $73.6 million. This project also includes an additional $41.4 million in open options pending award. This project will start in 1Q25 and is expected to be completed in 3Q25. Myrtle Beach Renourishment in South Carolina is valued at $72.3 million. Work is expected to start in 4Q25 and be completed in 1Q26. Both projects were awarded by the U.S. Army Corps of Engineers.

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Steelcase (SCS/$12.32 | Price Target: $16)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Reports Third Quarter Results
Rating: OUTPERFORM

3Q25 Results. Revenue was $794.9 million, up 2.1% y-o-y, with higher revenue from government, large corporate, healthcare, and education customers as the drivers. Organic revenue was up 3%, with Americas up 7% and International off 8%. Gross margin came in at 33.4%, up 100 bp y-o-y. GAAP EPS totaled $0.16 versus $0.26, while adjusted EPS was $0.30 versus $0.29.

Green Shoots. Orders in the first three weeks of 4Q25 grew 15% y-o-y. Internationally, Steelcase is seeing higher project activity levels, with recent wins related to large opportunities with national accounts in France, Germany, and the Middle East. Continuation of such trends would bode well for future performance.

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Noble Capital Markets Research Report Wednesday, December 18, 2024

Companies contained in today’s report:

Comstock (LODE)/MARKET PERFORM – Investment Rating Lowered to Market Perform
Cumulus Media (CMLS)/MARKET PERFORM – Highlights From NobleCon20
MAIA Biotechnology (MAIA)/OUTPERFORM – Pediatric Designation Qualifies THIO For A Priority Review Voucher
Tonix Pharmaceuticals (TNXP)/OUTPERFORM – Tonix Announces FDA Acceptance Of NDA For Review

Comstock (LODE/$0.37)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Investment Rating Lowered to Market Perform
Rating: MARKET PERFORM

Reassessing the path to commercialization. We are lowering our investment rating to a Market Perform from Outperform. While Comstock has made significant progress advancing its business unit plans, we think the path toward commercializing its Fuels and Metals businesses could take longer than we previously expected and is subject to a number of risk factors, including execution and financing. Based on the company’s liquidity, anticipated capital requirements, risk and reward profile, and lead time associated with commercializing its businesses, we think a Market Perform is appropriate.

SBC Commerce transaction. In August, Comstock announced a significant and promising transaction with SBC Commerce LLC (SBCC), a U.S. based private equity group, to directly invest in each of Comstock’s businesses and acquire Comstock’s properties in Silver Springs, Nevada. Our previous valuation and price target were based in part on the implied value of the transaction. To date, no definitive agreement has been announced with SBC Commerce, and it is unclear to us whether the transaction will close as contemplated. We look forward to an update and will wait to assess any final agreement(s).

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Cumulus Media (CMLS/$0.75)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Highlights From NobleCon20
Rating: MARKET PERFORM

NobleCon20. On December 4, Frank Lopez-Balboa, CFO, presented at NobleCon20 at Florida Atlantic University (FAU) in Boca Raton, Florida, to the investment community. A replay of the presentation can be viewed here. Notably, the presentation highlighted the prospect of digital revenue growth, a national advertising recovery, which accounts for roughly 50% of revenue, and its sizeable cost reduction efforts.

Digital Outlook. Notably, digital revenue has been a bright spot for the company throughout 2024, given that revenue growth has been positive every quarter. Mr. Frank Lopez-Balboa highlighted his optimism about the company’s digital growth prospects, stating it could generate north of $200 million in revenue a few years from now. Moreever, digital offers healthy contribution margins. 

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MAIA Biotechnology (MAIA/$2.2 | Price Target: $14)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Pediatric Designation Qualifies THIO For A Priority Review Voucher
Rating: OUTPERFORM

Successful Development Could Qualify For A Valuable Asset. Maia announced that THIO has received FDA designation as a drug for a rare pediatric disease (RPD) when used to treat pediatric-type diffuse high-grade gliomas (PDHGG). This designation makes MAIA eligible to receive a Priority Review Voucher (PRV) upon approval. The PRV can be redeemed for priority review for a different new drug application or sold to another company. During 2024, PRVs have been sold for between $100 million and $158 million.

Data In Pediatric Brain Cancer Was Presented In April 2024. MAIA presented clinical data testing THIO in the PDHGG indication at the American Association for Cancer Research (AACR) Annual Meeting in April 2024. Patients with a highly aggressive subtype of PDHGG known as diffuse intrinsic pontine glioma (DIPG) were treated with ionizing radiation and THIO. The results showed significant decreases in cell proliferation and anti-cancer effects.

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Tonix Pharmaceuticals (TNXP/$0.33 | Price Target: $4)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Tonix Announces FDA Acceptance Of NDA For Review
Rating: OUTPERFORM

New Drug Application For Tonmya Accepted For Review. Tonix announced that the FDA has accepted the filing of the Tonmya NDA, showing that the application met the requirements for a full review. Tonmya received Fast Track designation, and an application for Priority Review was filed. Next, notification of the assigned PDUFA date (the statutory date for completing a review under the Prescription Drug User Fee Act) and Priority Review status are expected in about 14 days.

We Believe Tonmya Can Have A Significant Impact On Fibromyalgia Treatment. Symptoms of fibromyalgia include chronic pain, insomnia, depression, brain fog, fatigue, and abdominal cramps with varying severity. This variety of physical and cognitive symptoms has been treated with a combination of pain medications, anti-depressants, insomnia drugs, and neurological drugs. Tonmya is the first drug that was developed for fibromyalgia. Its clinical trials showed strong statistical significance in its primary endpoint (pain reduction) and all six secondary endpoints. No other single drug has shown this broad effect on multiple fibromyalgia symptoms.

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Noble Capital Markets Research Report Tuesday, December 17, 2024

Companies contained in today’s report:

Comtech Telecommunications (CMTL)/MARKET PERFORM – Late 1Q25 Financials
Lucky Strike Entertainment (LUCK)/OUTPERFORM – A New Chapter as Lucky Strike
The GEO Group (GEO)/MARKET PERFORM – An Investment and a Leadership Change
Townsquare Media (TSQ)/OUTPERFORM – Timeliness Appears To Have Improved

Comtech Telecommunications (CMTL/$3.3)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Late 1Q25 Financials
Rating: MARKET PERFORM

A NT10-Q. Comtech missed the deadline for filing its 10-Q for the period ended October 31, 2024, the first quarter of the Company’s fiscal 2025. Unfortunately, this is another late filing, following an NT10-K for the 2024 fiscal year and an NT10-Q for the fiscal third quarter of 2024. We are hopeful the Company will be able to file the required documents shortly.

Reasons. According to the 12b-25 filing, Comtech is unable to file on a timely basis due to “the Company’s ongoing efforts to finalize its condensed consolidated financial statements, which include: (i) its recoverability assessments of (x) receivables and contract assets related to a certain international reseller of our troposcatter technologies, and (y) goodwill and certain long-lived assets due to the Company’s ongoing evaluation of its strategic transformation plans; and (ii) the accounting for and presentation of certain debt instruments and exchanges of convertible preferred shares.”

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Lucky Strike Entertainment (LUCK/$10.52 | Price Target: $17.5)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
A New Chapter as Lucky Strike
Rating: OUTPERFORM

Complete rebrand to Lucky Strike. On December 12, the company announced that it had completed its recently announced rebranding to Lucky Strike Entertainment, which was effective on December 16th. The newly branded company will trade on the NYSE under the symbol “LUCK” as of today.

An acquired brand. The company acquired Lucky Strike Entertainment in September of last year. At that time, management noted that the company would test the brand strength of Lucky Strike in comparison with the Bowlero brand. We believe that Lucky Strike has a strong brand presence and is a compelling change for the company. 

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The GEO Group (GEO/$27.73)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
An Investment and a Leadership Change
Rating: MARKET PERFORM

Ramping Up. The GEO Group announced a $70 million investment to expand the Company’s detention capacity, secure transportation, and electronic monitoring services to U.S. Immigration and Customs Enforcement (“ICE”). Already the largest services provider to ICE, GEO is currently providing approximately 21,000 detention beds (with a present census of 14,000) at 16 ICE Processing Centers with the ability to expand to a minimum of 32,000 beds at 23 facilities.

Financing. To help offset the $70 million investment in capital expenditures and further reduce debt, GEO intends to pursue the possible sale of several underperforming company-owned state correctional facilities. Any potential sale of facilities will depend, at least partially, on valuation, but we view this positively.

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Townsquare Media (TSQ/$10.08 | Price Target: $21)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Timeliness Appears To Have Improved
Rating: OUTPERFORM

Digital revenue trends are improving. On December 4, Stu Rosenstein, CFO, presented at NobleCon20 at Florida Atlantic University (FAU) in Boca Raton, Florida, to the investment community. A replay of the presentation can be viewed here. Notably, we believe the company’s digital businesses are gaining momentum, and we anticipate an acceleration of revenue growth for Ignite and a swing towards positive growth for Interactive.

Townsquare Interactive posed to turn the corner toward revenue growth. Notably, the company’s Interactive business has been experiencing improving revenue trends and net subscriber growth throughout 2024. Furthermore, we believe the interactive business has turned the corner in Q3 and will swing towards positive revenue growth in Q4.

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Noble Capital Markets Research Report Monday, December 16, 2024

Companies contained in today’s report:

Aurania Resources (AUIAF)/OUTPERFORM – Looking Ahead to a Catalyst-Rich 2025
Vince Holding Corp. (VNCE)/OUTPERFORM – A Closer Look At The Recent Quarter

Aurania Resources (AUIAF/$0.313 | Price Target: $0.6)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Looking Ahead to a Catalyst-Rich 2025
Rating: OUTPERFORM

Private placement financing. Aurania announced the closing of the first tranche of its recently announced private placement of up to 8,888,888 units at a price of C$0.45 per unit to raise gross proceeds of up to C$4,000,000. In the first tranche, a total of 2,726,499 units were sold for gross proceeds of C$1,226,924.55. Each unit is comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one common share at an exercise price of C$0.75 for a period of 24 months following the closing of the first tranche. The net proceeds will be used to fund exploration in France including impact studies, exploration programs at key targets in Ecuador, and working capital.

Preparing for 2025. In November, Aurania commenced an induced polarization (IP) geophysical survey over its Kuri-Yawi epithermal gold target at the company’s Lost Cities-Cutucu project in southeastern Ecuador. The IP survey is designed to identify deep conductors that could correspond to gold mineralization and to target drill holes for the planned program in 2025. The IP survey is expected to be completed this month with results expected in early 2025 following a review and interpretation of the data.

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Vince Holding Corp. (VNCE/$1.57 | Price Target: $3)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
A Closer Look At The Recent Quarter
Rating: OUTPERFORM

Solid Q3 Results. The company reported favorable Q3 revenue of $80.2 million and adj. EBITDA of $7.1 million, both of which were in line with our estimates of $81.5 million and $7.0 million, respectively. Furthermore, gross margin improved by 580 basis points from the prior year period. In our view, the solid results demonstrate the efficacy of the company’s initiatives to enhance its expense structure and improve gross margins.

Improved gross margin. The company’s strong gross margin improvement was largely driven by a 480bp improvement in product costs and reduced freight costs, with an 80bp contribution from lower promotional activity and discounting in its Direct To Consumer (DTC) segment. 

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Noble Capital Markets Research Report Friday, December 12, 2024

Companies contained in today’s report:

1-800-Flowers.com (FLWS)/OUTPERFORM – Highlights From NobleCon20
Conduent (CNDT)/OUTPERFORM – Highlights from NobleCon20
Snail (SNAL)/OUTPERFORM – Highlights From NobleCon20

1-800-Flowers.com (FLWS/$7.94 | Price Target: $14)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Highlights From NobleCon20
Rating: OUTPERFORM

NobleCon20. On December 3rd, management presented at NobleCon20 at Florida Atlantic University (FAU) in Boca Raton, Florida, to the investment community. The presentation conducted by Bill Shea, CFO, highlights the company’s strategic initiatives to grow revenue and return to a normalized gross margin. A replay of the presentation can be viewed here.

A transitional year. Revenue guidance is flat to down mid single digits, but should start to grow again next year. The key growth drivers are expected to be led by its innovation initiatives, introduction of new products (ie. most recently, Cheryl’s Ice Cream, Wolferman’s New York Style Bagels, and Greeting Cards), bundling products (ie. Harry & David’s baskets with Shari’s Berries), products with new price points, and driving repeat customers. Plus, the company believes there is more to do with its 1.1 million Passport Loyalty customers, which is 10% of its customer base but accounts for over 20% of its revenues.

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Conduent (CNDT/$4.32 | Price Target: $7)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Highlights from NobleCon20
Rating: OUTPERFORM

NobleCon20. On December 3, management presented at NobleCon20 at Florida Atlantic University (FAU) in Boca Raton, Florida. Giles Goodburn, Global Head of FP&A and Investor Relations, highlighted the company’s ongoing transformation to a leaner, more focused organization. A replay of the presentation can be found here.

Business transformation underway. Since the start of 2024, the company has completed several divestitures totaling roughly $780 million in net proceeds. This has allowed the company to make significant balance sheet improvements. The company is also in the process of cutting corporate overhead and various stranded costs following the recent divestitures. Moreover, with an infusion of new business leaders across its three segments we believe the company is positioning itself for future revenue growth as a more focused and efficient organization.  

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Snail (SNAL/$1.4 | Price Target: $4)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Highlights From NobleCon20
Rating: OUTPERFORM

NobleCon20. On December 3rd, management presented at NobleCon20 at Florida Atlantic University (FAU) in Boca Raton, Florida, to the investment community. The presentation conducted by Tony Tian, CEO, and Heidy Chow, CFO, highlighted the company’s release roadmap, strategy, and unique offerings. A replay of the presentation can be viewed here.

Release roadmap. There are five free Downloadable Content (DLC) packages that are included in the sale of  Ark: Survival Ascended (ASA), three of which have not been released yet. The next DLC is expected in Q4, and two more are expected in 2025. Importantly, as DLC packages included in ASA are released, the company will defer less revenue from ASA sales, which should provide investors with a clearer picture of company operating results. 

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Noble Capital Markets Research Report Thursday, December 12, 2024

Companies contained in today’s report:

Maple Gold Mines (MGMLF)/OUTPERFORM – Thoughts on the Winter 2024/2025 Exploration and Drilling Program
Resources Connection (RGP)/OUTPERFORM – Workforce Reduction Initiated; Confirms 2Q25 Guidance
The GEO Group (GEO)/MARKET PERFORM – NobleCon20 Highlights
The ODP Corporation (ODP)/OUTPERFORM – Presentation Highlights from NobleCon20

Maple Gold Mines (MGMLF/$0.04 | Price Target: $0.25)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Thoughts on the Winter 2024/2025 Exploration and Drilling Program
Rating: OUTPERFORM

NobleCon20 presentation. During Noble’s recent NobleCon20 Annual Emerging Growth Equity Conference, Mr. Kiran Patankar, Maple Gold’s CEO, provided some additional details regarding the company’s upcoming exploration and drilling program. A link to Maple Gold’s NobleCon20 presentation is here. Recall that Maple Gold has a 400 square kilometer district-scale property in Quebec’s Abitibi Greenstone Gold Belt, including gold mineral resources of approximately three million ounces at Douay with significant expansion potential and the past producing Telbel and Eagle West mines at Joutel.

Upcoming drilling program. Maple Gold’s fully funded drilling program is expected to commence shortly and run through March. The company is using a data-driven approach toward exploration that is focused on expanding the company’s gold mineral resource from approximately three million ounces to five million ounces across the combined Douay/Joutel projects, along with making new discoveries. An updated resource estimate and scoping study is expected to be completed within the next 12 to 18 months.

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Resources Connection (RGP/$8.81 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Workforce Reduction Initiated; Confirms 2Q25 Guidance
Rating: OUTPERFORM

Workforce Reduction. We had an opportunity to speak with management about the December 6th 8-k filing in which Resources Connection announced a reduction in the global management and administrative workforce intended to enhance efficiencies through reduced costs and streamlined operations. The RIF impacts about 8% of the management and administrative workforce. Cost savings are expected to range from $4-$5 million in 2H25, or $8-$10 million annually on a go-forward basis. Restructuring charges of $2.5-$3.0 million are expected to be recognized in the third quarter of fiscal 2025.

But Reaffirming 2Q25 Guidance. Management re-confirmed guidance for 2Q25 (ended November 23, 2024). For 2Q25, the Company expects full quarter revenue to be in the range of $135-$140 million and expects gross margin to be in the range of 36% to 37%. The Company’s run rate SG&A for the quarter is expected to be in the range of $48-$50 million.

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The GEO Group (GEO/$27.8)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
NobleCon20 Highlights
Rating: MARKET PERFORM

NobleCon20. The GEO Group CEO Brian Evans presented at NobleCon20. Highlights included potentially improving segment trends, an aging prison infrastructure, and reducing debt to be more flexible. A rebroadcast is available at https://www.channelchek.com/videos/the-geo-group-noblecon20-replay.

Segment Trends. With the new Trump administration approaching in January, management notes the administration’s immigration enforcement policies may positively impact its detention capacity, electronic monitoring, and secure transportation businesses. GEO remains poised to capitalize on any increase in detention and/or enhanced supervision with roughly 8,000 beds at existing facilities and 10,000 beds at six company-owned currently idle facilities. In addition, ISAP populations were roughly double today’s level two years ago.

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The ODP Corporation (ODP/$28.29 | Price Target: $35)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Presentation Highlights from NobleCon20
Rating: OUTPERFORM

NobleCon20. The ODP Corporation Co-CFO Adam Haggard and VP of IR Tim Perrott presented at NobleCon20. Highlights included are the Company’s pivot towards B2B, targeting new markets, and the return of value to shareholders. 

B2B Pivot. Noted in our previous report, ODP is accelerating its B2B pivot through leveraging its nationwide supply chain, extensive B2B customer base, compelling value proposition, and strong balance sheet. A recent B2B win involves the Company’s ODP Business Solutions with a recent key contract win that is worth up to $1.5 billion over 10 years. Another involves Veyer with a major contract with one of the world’s largest social media focused e-commerce companies to deliver warehouse and fulfillment services for their online sales. In our view, both contracts represent management’s focus on its efforts within the space.

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Noble Capital Markets Research Report Wednesday, December 11, 2024

Companies contained in today’s report:

FAT Brands (FAT)/OUTPERFORM – Highlights from NobleCon20
Great Lakes Dredge & Dock (GLDD)/OUTPERFORM – NobleCon20 Highlights
V2X (VVX)/OUTPERFORM – A New JV
Vince Holding Corp. (VNCE)/OUTPERFORM – Q3 Is Illustrative Of Its Improving Margin Story

FAT Brands (FAT/$5.53 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Highlights from NobleCon20
Rating: OUTPERFORM

NobleCon20. FAT Brands Chairman Andy Wiederhorn presented at NobleCon20. Highlights included FAT Brands’ acquisition strategy, Twin Peaks spin-off, and focus for 2025. A rebroadcast is available at https://www.channelchek.com/videos/fat-brands-inc-noblecon20-replay

Acquisition Strategy. Management noted the Company utilizes a near-term focus on brands that will accelerate growth for its Twin Peaks brand as well as drive revenue and profit at its cookie and pretzel factory. Smokey Bones is an example of accelerating Twin Peaks growth as select Smokey Bones are being converted into Twin Peaks due to having a similar format, providing more efficient conversions. The Nestle Toll House Café by Chip acquisition drove unit growth of Great American Cookies while also getting cookie dough business for its manufacturing facility.

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Great Lakes Dredge & Dock (GLDD/$12.66 | Price Target: $14)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
NobleCon20 Highlights
Rating: OUTPERFORM

NobleCon20. Great Lakes CFO Scott Kornblau presented at NobleCon20. Highlights included the strong dredging market, expanding into the offshore wind market in the U.S., and having a record backlog. A rebroadcast is available at https://www.channelchek.com/videos/great-lakes-dredge-dock-corporation-noblecon20-replay.

Dredging Market. The outlook for the dredging market remains robust, in our view. The Army Corps of Engineers budget in fiscal 2024 was a record $8.7 billion, a record that likely will be surpassed in fiscal 2025 as both the House and Senate appropriations committees submitted proposed fiscal 2025 budgets with Army Corp funding at or above the $10 billion level. We expect Great Lakes’ bid opportunity pipeline to remain strong, leading towards potential backlog and revenue growth.

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V2X (VVX/$59.49 | Price Target: $72)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A New JV
Rating: OUTPERFORM

JV. Yesterday, V2X, Inc. announced a strategic joint venture with Parsons Corporation (NYSE: PSN) in pursuit of the National Science Foundation Antarctica Science and Engineering Support Contract (ASESC) with an $8 billion ceiling value. The newly formed joint venture, named Polar Science Alliance (PSA), is a wholly dedicated entity that will enable world class scientific research support services for the United States Antarctic Program (USAP) over the next two decades.

Strengths. V2X brings over a decade of experience in large-scale polar operations and logistics expertise and was recently awarded the follow-on option for a ten year period supporting the multibillion-dollar U.S. Space Force, Pituffik Space Base in Greenland. V2X boasts decades of expertise in science support services. Parsons has 55 years of successful and proven polar operations experience, beginning in 1970 on the North Slope of Alaska. Parsons’ capabilities span program and construction management, engineering and planning, and logistics.

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Vince Holding Corp. (VNCE/$1.69 | Price Target: $3)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Q3 Is Illustrative Of Its Improving Margin Story
Rating: OUTPERFORM

Q3 Results. The company reported Q3 revenue of $80.2 million, which was in line with our estimate of $81.5 million. Notably, gross margin improved by 580 basis points from the prior year period. We believe the solid results demonstrate the efficacy of the company’s initiatives to enhance its expense structure andimprove gross margin.

Improved gross margin. The company’s strong gross margin improvement was largely driven by a 480bp improvement in product costs and reduced freight costs, with an 80bp contribution from lower promotional activity and discounting in its Direct To Consumer (DTC) segment. 

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Noble Capital Markets Research Report Tuesday, December 10, 2024

Companies contained in today’s report:

E.W. Scripps (SSP)/OUTPERFORM – Highlights From NobleCon20
GDEV (GDEV)/OUTPERFORM – Highlights From NobleCon20: Geared For Growth
GeoVax Labs (GOVX)/OUTPERFORM – GeoVax Receives Allowance For New Patent Covering Vaccine Platform Technologies
Graham (GHM)/OUTPERFORM – NobleCon20 Presentation Highlights
Information Services Group (III)/OUTPERFORM – Highlights from NobleCon20
NN (NNBR)/OUTPERFORM – Presentation Highlights from NobleCon20

E.W. Scripps (SSP/$2.36 | Price Target: $10)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Highlights From NobleCon20
Rating: OUTPERFORM

NobleCon20. On December 3rd, management presented to the investment community at NobleCon20, held at Florida Atlantic University (FAU) in Boca Raton, Florida. The fireside chat presentation with Jason Combs, Chief Financial Officer, highlighted the company’s strategy regarding Scripps Sports, retransmission revenue, political revenue and debt reduction. A replay of the presentation can be viewed by clicking here.

Favorable sports model. Scripps Sports employs a unique model that offers sports teams wider viewership than the traditional Regional Sports Networks (RSNs) model, which is failing. Notably, the company has local broadcasting rights for the Las Vegas Golden Knights, Florida Panthers, and the Arizona Coyotes. Furthermore, the company has the national broadcast rights for the WNBA, which has seen a significant increase in viewership this season.

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GDEV (GDEV/$23 | Price Target: $70)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Highlights From NobleCon20: Geared For Growth
Rating: OUTPERFORM

NobleCon20. On December 3rd, management presented to the investment community at NobleCon20, held at Florida Atlantic University (FAU) in Boca Raton, Florida. The presentation was conducted by Alexander Karavaev, chief financial officer, and Roman Safiyulin, chief corporate development officer. The duo highlighted the company’s dynamic growth prospects and the prospective swing toward growth in bookings. A replay of the presentation can be viewed by clicking here.

Dynamic business model. The company focuses on live-service games, meaning that the games have a continuous lifespan and are updated on an ongoing basis. This allows for a stable revenue base that grows over time, unlike many gaming companies with a “lumpier” revenue profile that oscillates based on game release schedules. 

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GeoVax Labs (GOVX/$2.6 | Price Target: $12)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
GeoVax Receives Allowance For New Patent Covering Vaccine Platform Technologies
Rating: OUTPERFORM

Intellectual Property Estate Is Expanding. GeoVax announced that the US Patent and Trademark Office has issued a Notice of Allowance for its patent application covering the expression of antigens in virus-like particles delivered with a viral vector. This is a mechanism used to stimulate an immune response from the GeoVax MVA-based vaccines. The patent allowance is the final step in the USPTO application process, and the patent will be issued after payment of fees.

The Application Covers Expression Of Immune Stimulation Antigens. The patent titled “Vaccinia Viral Vectors Encoding Chimeric Virus Like Particles” includes claims for expressing a tumor associated antigen (TAA) in virus-like particles (VLPs) from a recombinant Modified Vaccinia Ankara (MVA) viral vector. This covers vaccines that use the MVA as a vector to deliver DNA that assembles into non-infectious virus-like constructs to simulate an immune response against the targeted virus. This mechanism is used in the MVA MUC-1 (cancer) and infectious disease vaccines. A detailed description of the MVA platform and VLPs begins on page 7 of our Initiation of Coverage report.

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Graham (GHM/$43.25 | Price Target: $45)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
NobleCon20 Presentation Highlights
Rating: OUTPERFORM

NobleCon20. Graham CFO Chris Thome and Vice President Matt Malone presented at NobleCon20. Highlights included the growth potential in U.S. Navy contracts, revenue diversification in the Space Segment, and M&A strategy. A rebroadcast is available at https://www.channelchek.com/videos/graham-corporation-noblecon20-replay.

Potential in U.S. Navy. The Navy’s Ford Class Carrier and Virginia and Columbia Class Submarines represent $1.2 to $1.4 billion in revenue potential based on planned projects. These project build timelines are expected to be completed as early as 2035 to as late as 2058, providing visibility and recurring revenue. With investments from defense customers to expand capacity and 80% of its defense revenue sole sourced, we believe Graham is uniquely positioned to expand its relationship with the Navy and other defense customers.

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Information Services Group (III/$3.68 | Price Target: $5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Highlights from NobleCon20
Rating: OUTPERFORM

NobleCon20. Information Services Group CEO Michael Connors and CFO Michael Sherrick presented at NobleCon20. Management highlighted the opportunity in AI, including ISG Tango, and driving recurring revenue. A rebroadcast is available at https://www.channelchek.com/videos/information-services-group-noblecon20-replay.

Growth in AI. The opportunity in AI for ISG is prevalent, as management noted that 55% of large enterprises are focused on developing an AI roadmap today. This focus translates into a roughly 3 times increase in projected enterprise AI spending through 2025. ISG has two services in AI Advisory and Research that companies can utilize for the application of AI and to be informed on the best use cases. In our view, ISG is well-equipped to handle increased demand through its services.

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NN (NNBR/$3.9 | Price Target: $6)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Presentation Highlights from NobleCon20
Rating: OUTPERFORM

NobleCon20. NN CFO Chris Bohnert presented at NobleCon20. Highlights included tariffs being a benefit to the Company, NN’s transformation plan, and its five-year growth plan. A rebroadcast is available at https://www.channelchek.com/videos/nn-inc-noblecon20-replay.

Tariffs Good for NN? The Trump administration is seeking protection for U.S. based production through the use of tariffs, potentially increasing costs for companies. However, NN has roughly $120 million of tariff-protected U.S.-produced auto parts and does not import from China. For its China operations, the Company produces auto parts in China for use in the local market there. As a result, we believe the Company can protect its margins through not paying tariffs and can potentially have pricing power over parts produced in the U.S. compared to other companies that import.

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Noble Capital Markets Research Report Monday, December 9, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – November Production Numbers Are In
DLH Holdings (DLHC)/OUTPERFORM – New Administration Brings More Opportunity
Kelly Services (KELYA)/OUTPERFORM – Another $50 Million Share Repurchase Authorized
Schwazze (SHWZ)/OUTPERFORM – Update on Accounting

Bit Digital (BTBT/$4.88 | Price Target: $5.5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
November Production Numbers Are In
Rating: OUTPERFORM

HPC and AI. As of November 30, 2024, Bit Digital had 266 servers actively generating revenue and earned approximately $4.3 million of total unaudited GPU Cloud revenue during the month. At Enovum’s data center, the Company had 13 customers actively generating revenue with colocation revenue of approximately $503,500. We believe the Boosteroid agreement, along with the two MSAs signed in the third quarter should expand revenue in the coming months.

Mining Side. The Company produced 44.9 BTC in the month, a 14.0% decrease from 52.2 BTC in October. The active hash rate was 2.51 EH/s, a slight increase from 2.43 EH/s last month. Bit Digital’s hosting provider, Coinmint, being acquired resulted in the termination of hosting contracts. Management has signed term sheets for the lost hosting capacity and is replacing energy inefficient miners, with a 3.0 EH/s active hash rate expected by the first half of 2025.

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DLH Holdings (DLHC/$8.08 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
New Administration Brings More Opportunity
Rating: OUTPERFORM

4Q Results. Reported revenue was $96.4 million compared to $101.5 million from last year and below our $101 million estimate. Net income for the quarter was $2.3 million, or $0.16/sh, compared to a net loss of $2.6 million, or $0.18/sh, last year. Adjusted EBITDA was $10.7 million, down from $12.1 million last year but above our estimate of $10.5 million.

CMOP. Management noted that the Company’s CMOP portfolio is under new task orders that go into the second quarter of 2025. Significantly, the Company has not continued its joint venture bids for specific locations, citing performance dilution. We expect DLH to bid on fewer CMOP contracts, resulting in lower CMOP revenue, likely once past the current extension.

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Kelly Services (KELYA/$14.33 | Price Target: $27)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Another $50 Million Share Repurchase Authorized
Rating: OUTPERFORM

New Authorization. Kelly’s Board of Directors approved a new share repurchase program, authorizing the Company to purchase up to $50 million of its Class A common stock. The authorization expires on December 2, 2026. Shares under the authorization may be purchased from time to time in the open market, in privately negotiated transactions, or by other means.

Size. The $50 million authorization represents approximately 10% of Kelly’s current Class A market capitalization. We believe any potential share repurchases will be balanced against continued paydown of debt, additional M&A opportunities, and re-investment in the business to drive organic growth.

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Schwazze (SHWZ/$0.06 | Price Target: $4)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Update on Accounting
Rating: OUTPERFORM

Update. Schwazze, in conjunction with its new auditors, has determined that its financial statements for the two fiscal years ended December 31, 2023, will be restated due to the identification of certain accounting adjustments needed primarily relating to technical accounting areas. The Company filed an 8-k describing the necessary adjustments.

Impact. Although mostly related to technical accounting areas, the Company has concluded that the impact of these corrections is material and, therefore, worthy of restatement. However, Schwazze does not currently believe that the foregoing corrections will have any negative material impact on the Company’s revenue, adjusted EBITDA, cash from operations, or cash position.

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Noble Capital Markets Research Report Monday, November 27, 2024

Companies contained in today’s report:

AZZ (AZZ)/OUTPERFORM – Increasing Our FY2025 and FY2026 Estimates and Price Target
Codere Online (CDRO)/OUTPERFORM – Q3 Beat Despite Exchange Rate Headwinds
MustGrow Biologics Corp. (MGROF)/MARKET PERFORM – A Potential Game Changer

AZZ (AZZ/$93.14 | Price Target: $110)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Increasing Our FY2025 and FY2026 Estimates and Price Target
Rating: OUTPERFORM

A market leader with a strong growth profile. AZZ is the leading independent provider of hot dip galvanizing and coil coating solutions to a broad range of end markets. With AZZ Precoat Metals’ new manufacturing facility in Washington, Missouri expected to be completed in fiscal year 2025, we expect the facility to contribute to top-line growth in fiscal year 2026 while capital expenditures decline. Approximately 75% of the facility’s production is already committed and could generate approximately $50 million to $60 million in revenue on an annualized basis once production is fully ramped.

Updating estimates. We have increased our FY 2025 revenue, EBITDA, and EPS estimates to $1.598 billion, $344.8 million and $5.00, respectively, from $1.584 billion, $343.0 million, and $4.95. Our estimates reflect stronger sales growth during the remainder of the year and into 2026. Our FY 2026 revenue, EBITDA, and EPS estimates have been increased to $1.673 billion, $367.4 million, and $5.60, respectively, from $1.650 billion, $361.2 million, and $5.45. We think the incoming Trump administration could support pro-growth economic policies that could favorably impact AZZ’s business. While we have not assumed any gross margin expansion during the remainder of FY 2025, gross margin increases modestly in FY 2026 to 23.8% versus our prior estimate of 23.5%.

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Codere Online (CDRO/$7.75 | Price Target: $14)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Q3 Beat Despite Exchange Rate Headwinds
Rating: OUTPERFORM

Strong Q3 results. The company reported 20% year-over-year revenue growth in Q3 to €51.7 million. Q3 was also the company’s third consecutive quarter with positive adj. EBITDA generation, which was €1.5 million. Revenue and adj. EBITDA exceeded our estimates of €50.0 million and €0.4 million, respectively.

Exchange rate headwinds in Mexico. Revenue in Mexico grew 27%, year-over-year, despite weakness in the Mexican Peso. Notably, on a constant currency basis, revenue in Mexico was up 43%, as the company continued its focus in the country.

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MustGrow Biologics Corp. (MGROF/$1.23)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A Potential Game Changer
Rating: MARKET PERFORM

Proposed Acquisition. Last week, MustGrow signed a non-binding term sheet with Univar Solutions Canada Ltd. for the proposed acquisition of NexusBioAg. The acquisition is subject to certain conditions, including due diligence, the negotiation and execution of a definitive asset purchase agreement, and approval by the TSX Venture Exchange.

Light on Details.  Terms of the proposed acquisition were not disclosed. Nor was any detail regarding sales or net income for NexusBioAg. MustGrow also would need to obtain financing for the proposed deal. The purchase consideration for the proposed acquisition is anticipated to include (i) a deferred cash payment and (ii) contingent payments made in 2025 and 2026. The parties are targeting a closing by yearend.

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Noble Capital Markets Research Report Wednesday, November 27, 2024

Companies contained in today’s report:

Alliance Resource Partners (ARLP)/OUTPERFORM – Increasing Longer-Term Oil and Gas Royalty Volume Expectations; Price Target Increased
MustGrow Biologics Corp. (MGROF)/MARKET PERFORM – Sales are Trickling In
Travelzoo (TZOO)/OUTPERFORM – Raising Price Target
Traws Pharma (TRAW)/OUTPERFORM – Antiviral Pipeline Makes Progress and Moves Forward

Alliance Resource Partners (ARLP/$28.17 | Price Target: $33)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Increasing Longer-Term Oil and Gas Royalty Volume Expectations; Price Target Increased
Rating: OUTPERFORM

Adjusting estimates. While our 2024 and 2025 estimates are unchanged, we have increased our 2026 through 2030 EBITDA and EPU estimates to reflect higher year-over-year growth in oil and gas royalty volumes of 12.5% compared to our previous estimate of 2.0% which we think is too conservative based on the partnership’s record. Our commodity price deck is unchanged. We have assumed an average of $75 million per year in oil and gas reserve acquisitions in 2026 through 2030. Based on our higher forward estimates and a modest 100-basis point reduction in our discount rate to 9.5%, we have increased our price target to $33 per share from $28.

Hail to the incoming chief. We expect industries associated with the fossil fuels to benefit from the upcoming change in U.S. Presidential administrations. It is our belief that the Trump Administration may seek to roll back the EPA’s carbon emissions rule which could extend the life of existing coal-fired power plants. Moreover, we think the business climate could improve based on a move toward market-based energy policies and a reduction in regulatory burden.

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MustGrow Biologics Corp. (MGROF/$1.23)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Sales are Trickling In
Rating: MARKET PERFORM

3Q Results. Revenue for the quarter totaled CAD$279,182, including the Company’s CAD$272,500 in deferred revenue. Excluding this, revenue was CAD$6,682, including TerraSante sales’ impact. We estimated revenue of CAD$15,000. Net loss was CAD$1.7 million, or a loss of $0.03/sh, compared to a loss of CAD$1.9 million last year, or  $0.04/sh. We estimated a net loss of CAD$1.9 million or $0.04/sh.

Sales Revenue is Here. Notably, the quarter recognized product sales revenue for the TerraSante product for the first time. We expect TerraSante revenue to begin to impact revenue in a meaningful way in the latter half of 2025. As the Company receives more approvals from different states, we believe the opportunity to showcase TerraSante to farmers can expand, along with revenue.

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Travelzoo (TZOO/$19.82 | Price Target: $25)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Joshua Zoepfel jzoepfel@noblefcm.com |
Raising Price Target
Rating: OUTPERFORM

Moving towards enhanced growth. We believe that the company’s strategic focus on developing a subscription model will accelerate revenue and cash flow growth in 2025 and beyond. We anticipate that even a modest 1% penetration of its 30+ million members will accelerate 2025 revenue and cash flow growth to 12% and roughly 15%, respectively. 

Providing revenue and cash flow stability. The subscription model is being launched Jan. 1, 2025 and is expected to offer a ballast to the company’s more cyclical advertising driven model. Notably, the company is not expected to abandon its 30 million plus members, but simply migrate a portion of those members to annual subscriptions, largely as those members seek to take advantage of the travel “deals”.

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Traws Pharma (TRAW/$4.09 | Price Target: $6)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Antiviral Pipeline Makes Progress and Moves Forward
Rating: OUTPERFORM

Traws Has Made Significant Progress During 2024. In May 2024, Onconova and Transfynydd combined to form Traws Pharmaceuticals. The new company brought together the Transfynydd small molecules for respiratory viral diseases with the Onconova clinical-stage oncology pipeline. The company is planning Phase 2 clinical trials for its antivirals while looking for collaborations and/or partnerships for the oncology pipeline.

Phase 2 Trials Are Planned For Two Antivirals. Tivoxavir marboxil (TRX100) is a protease inhibitor of enzyme needed for the reproduction of the virus that causes seasonal and pandemic influenza. Ratutrelvir (TRX01) inhibits the protease Mpro (the main protease or 3CL), the main protease of SAR-CoV-2 (the COVID-19 virus), but does not require co-administration of a metabolic inhibitor. This avoids the risk of drug-drug interactions and potential side effects. Phase 2 studies for both drugs are expected to begin in 1H24.

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Noble Capital Markets Research Report Tuesday, November 26, 2024

Companies contained in today’s report:

Aurania Resources (AUIAF)/OUTPERFORM – Increasing Financial Flexibility Ahead of the 2025 Exploration Program
FAT Brands (FAT)/OUTPERFORM – Another Step

Aurania Resources (AUIAF/$0.33 | Price Target: $0.65)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Increasing Financial Flexibility Ahead of the 2025 Exploration Program
Rating: OUTPERFORM

Private placement financing. Aurania intends to raise up to C$4.0 million in a private placement of up to ~8.9 million units at a price of C$0.45 per unit to fund exploration programs in France and Ecuador. Each unit will consist of one common share and one common share purchase warrant. Each warrant may be used to purchase one common share at an exercise price of C$0.75 for a period of 24 months following the closing of the offering. The private placement is expected to close in December and is contingent on the receipt of necessary approvals, including by the TSX Venture Exchange.

Concessions in Ecuador. Aurania reached an agreement with Ecuadorian authorities regarding the payment of its 2024 concession fees for its 42 mineral exploration concessions in Ecuador. Aurania has made a partial payment with the balance to be paid within the following six months, including interest associated with the outstanding amount. The concessions remain in good standing.

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FAT Brands (FAT/$5.32 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Another Step
Rating: OUTPERFORM

Step 2. FAT Brands completed the second step in its anticipated planned listing of its Twin Hospitality unit as a standalone public company. FAT successfully completed the refinancing of the whole business securitization credit facility of its Twin Peaks and Smokey Bones restaurant brands.

Details. The aggregate principal balance of the new Series 2024-1 fixed rate notes is $416.7 million across four tranches with a weighted average annual interest rate of 9.5%.  The interest rate on the new notes is modestly higher than the rate on the previous securitization notes. However, the first anticipated call date goes from January 2025 to October 2027. We would point out that if the new notes are not repaid or refinanced by October 2027, additional interest equal to 5.0% per annum will accrue on each tranche of notes. The noteholders also are receiving warrants to acquire an aggregate of 5% of the Class A common stock of Twin Hospitality.

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Noble Capital Markets Research Report Monday, November 25, 2024

Companies contained in today’s report:

Lifeway Foods (LWAY)/MARKET PERFORM – Another Rejection…And More

Lifeway Foods (LWAY/$24.26)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Another Rejection…And More
Rating: MARKET PERFORM

Rejected. Lifeway’s Board rejected Danone’s revised offer to acquire all of the LWAY shares it currently does not own for $27 per share. The Board stated the “revised proposal substantially undervalues Lifeway and is not in the best interests of the Company and its shareholders or other stakeholders.” Danone has yet to respond.

The Third Party. Following the rejection, Edward and Ludmila Smolyansky called for Lifeway’s Board to immediately establish an independent special committee to evaluate and negotiate a transaction with Danone or other potential buyers. In addition, Edward and Ludmila are seeking public disclosure of any valuation analysis done by Kroll when Kroll assisted the Board in June 2023 to explore strategic alternatives.

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Noble Capital Markets Research Report Friday, November 22, 2024

Companies contained in today’s report:

Euroseas (ESEA)/OUTPERFORM – Third Quarter Financial Results Exceed Our Expectations; Outlook Remains Favorable
Haynes International (HAYN)/NOT RATED – Acerinox Completes the Acquisition of Haynes International
Hemisphere Energy (HMENF)/OUTPERFORM – Third Quarter Results Ahead of Expectations

Euroseas (ESEA/$39.45 | Price Target: $68)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Hans Baldau hbaldau@noblefcm.com |
Third Quarter Financial Results Exceed Our Expectations; Outlook Remains Favorable
Rating: OUTPERFORM

Third quarter results. Euroseas Ltd. reported adjusted EBITDA and earnings per share of $36.1 million and $3.92, respectively, exceeding our estimates of $35.1 million and $3.77. Net revenues increased 6.9% on a year-over-year basis, and total daily vessel operating expenses decreased on a per-day per-vessel basis from $7,692 to $7,249. The revenue growth is mainly driven by a larger fleet, while the decrease in daily operating expenses is due to the company’s newly built vessels requiring less maintenance.

Favorable outlook. Charter and freight rates have rebounded after a slight dip during the summer and are expected to remain elevated throughout 2024 and into 2025. Ongoing disruptions in the Red Sea continue to support rates. The supply of new vessels in 2025 is anticipated to be lower than in the previous two years but could still put downward pressure on rates. Potential regulations regarding vessel speeds to reduce emissions could be implemented in 2025, which may help alleviate the downward rate pressure from the increasing supply. Furthermore, charter rates for eco-friendly vessels are projected to rise as emission regulations become more stringent and market demand for these types of vessels increases. 

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Haynes International (HAYN/$60.99)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Acerinox Completes the Acquisition of Haynes International
Rating: NOT RATED

Acquisition by North American Stainless. In February, Haynes International entered into an agreement to be acquired by North American Stainless, a wholly owned subsidiary of Acerinox. The transaction closed on November 21, 2024. We think the transaction is a positive outcome for Haynes’ various stakeholders.

Strategic benefits. Together, Haynes and VDM Metals will form Acerinox’s High-Performance Alloys Division. The integration of Haynes will support Acerinox’s strategic priorities, including the company’s focus on enhancing its operations in the U.S. market, high-performance alloys, and the aerospace sector. North American Stainless acquired all of the outstanding shares of Haynes for $61 per share in an all-cash transaction.

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Hemisphere Energy (HMENF/$1.38 | Price Target: $2.2)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Third Quarter Results Ahead of Expectations
Rating: OUTPERFORM

Third quarter financial results. Hemisphere Energy reported third-quarter net income of C$8.6 million or C$0.09 per share compared to C$8.5 million or C$0.08 per share during the third quarter of 2023. We had projected net income of C$8.4 million or C$0.08 per share. Year-over-year, oil and natural gas revenue increased 9.6% to C$26.7 million, driven by an 18.5% increase in average daily production to 3,621 barrels of oil equivalent (BOE) compared to 3,056 during the prior year period and our estimate of 3,600. The average sales price per BOE declined to C$80.06 compared to C$86.57 in the third quarter of 2023. Adjusted funds flow from operations amounted to C$11.7 million or C$0.12 per diluted share compared to C$11.7 million or C$0.11 per diluted share during the prior year period.

Updating estimates. While our 2024 EPS estimate is unchanged at C$0.31, we have modestly lowered our adjusted funds flow estimate to C$43.5 million from C$43.8 million. We lowered our full year average daily production expectations to 3,456 barrels of oil equivalent from 3,534 to reflect down time in the fourth quarter associated with vessel inspections and maintenance. While our 2025 average daily production estimate of 3,625 barrels of oil equivalent is unchanged, we lowered our 2025 AFF and EPS estimates to C$38.0 million and C$0.27 per share from C$42.6 million and C$0.32 to reflect lower crude oil prices.

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Noble Capital Markets Research Report Thursday, November 21, 2024

Companies contained in today’s report:

Century Lithium Corp. (CYDVF)/OUTPERFORM – Building on a Successful 2024
Codere Online (CDRO)/OUTPERFORM – Q3 Preview: Expecting a Strong Quarter

Century Lithium Corp. (CYDVF/$0.19 | Price Target: $2.35)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Building on a Successful 2024
Rating: OUTPERFORM

Closing out a productive year. Century Lithium had a productive year in 2024 with the two most significant achievements being completion of the feasibility study on the Angel Island lithium project and producing battery-grade lithium carbonate at its pilot plant. The feasibility study was released in April and while the economics were compelling, the company continues to focus on process optimization to improve potential returns by reducing the project’s estimated capital and operating costs. The use of a Chlor-alkali plant is unique and offers technical and environmental advantages by producing reagents for use onsite and producing surplus sodium hydroxide which can be sold to offset cash operating costs.

Environmental and regulatory permitting. On the environmental and permitting front, most of the required baseline studies have been completed and the company is editing a draft Plan of Operations and preparing key state permits for pollution and water quality compliance. Once the Plan of Operations is completed, the company may initiate the National Environmental Policy Act (NEPA) permitting process.

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Codere Online (CDRO/$7.3 | Price Target: $14)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Q3 Preview: Expecting a Strong Quarter
Rating: OUTPERFORM

Positive upside. The company is expected to report Q3 results within the next 2 weeks. We are re-iterating our Q3 estimates of $50.0 million in revenue and $0.4 million in adj. EBITDA. Moreover, we believe there could be upside to our revenue estimate, which may be conservative.

Peso headwind. We expect solid results in Spain, bolstered by the rollback in marketing restrictions in the country. As for the company’s other core market, Mexico, trends appear to be strong. Weakness in the Peso, however, has presented a headwind for the company, which reports in Euros. Nonetheless, we expect a strong quarter, currency exchange concerns notwithstanding.

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Noble Capital Markets Research Report Wednesday, November 20, 2024

Companies contained in today’s report:

EuroDry (EDRY)/OUTPERFORM – Third Quarter Performance Falls Short Amid a Weak Market
GeoVax Labs (GOVX)/OUTPERFORM – Interim Analysis Shows CM04S1 Outperforms mRNA Vaccines
Kelly Services (KELYA)/OUTPERFORM – Enhancing Education through Children’s Therapy Center Acquisition
Ocugen (OCGN)/OUTPERFORM – Interim Data From The Clinical Showcase Highlighted
QuoteMedia Inc. (QMCI)/OUTPERFORM – Working Through A Rough Patch

EuroDry (EDRY/$14.96 | Price Target: $20)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Hans Baldau hbaldau@noblefcm.com |
Third Quarter Performance Falls Short Amid a Weak Market
Rating: OUTPERFORM

Third quarter financial results.  Eurodry Ltd. reported an adjusted third-quarter net loss to controlling shareholders of $3.9 million or ($1.42) per share compared to an adjusted net loss of $675 thousand or ($0.24) per share during the prior year period. Adjusted EBITDA declined to $474 thousand compared to $3.1 million during the prior year period. The year-over-year decline was driven by a heavier-than-expected dry-docking quarter, a decline in charter rates due to a weakening Chinese economy and the reopening of trade routes.

Updating 2024 and 2025 estimates. We have lowered our 2024 adjusted EBITDA and earnings per share estimates to $14.7 million and $(2.46), respectively, from $23.0 million and ($0.85). Similarly, we have lowered our 2025 adjusted EBITDA and earnings per share to $30.8 million and $3.28, respectively, from $37.3 million and $5.65. Our revisions are primarily the result of a weak market outlook and corresponding rates.

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GeoVax Labs (GOVX/$2.91 | Price Target: $12)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Interim Analysis Shows CM04S1 Outperforms mRNA Vaccines
Rating: OUTPERFORM

CM04S1 Continues In Phase 2 As DSMB Determines mRNA Vaccine Arm Failed Primary Endpoint. CM04S1 is in Phase 2 testing as a COVID-19 booster against an approved mRNA vaccine in patients with chronic lymphocytic leukemia (CLL). An interim analysis conducted by an independent Data Safety Monitoring and Review Board (DSMB) determined that the mRNA arm did not meet its specified primary endpoint, but the trial will continue with the CM04S1 arm.

Study Tests CM04S1 In Immunocompromised Patients. The Phase 2 study enrolled patients that are immunocompromised due to CLL and its therapies, which often leaves them unable to mount a sufficient immune response and vulnerable to COVID-19 infection. The trial was designed to determine the immune response with Pfizer’s mRNA vaccine as the control and comparator arm. Patients were randomized at 1:1 into two arms, receiving either two injections of CM04S1 three months apart or the mRNA vaccine. 

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Kelly Services (KELYA/$14.16 | Price Target: $27)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Enhancing Education through Children’s Therapy Center Acquisition
Rating: OUTPERFORM

Adding On. Expanding on the Company’s Pediatric Therapy Services (PTS) portfolio in the Education segment, yesterday Kelly announced the acquisition of Children’s Therapy Center (CTC). Notably, the acquisition increases the current network’s scale of licensed therapists to Kelly, enabling practice flexibility between clinics and schools. The terms of the acquisition were not disclosed, but we do not believe it will impact fourth quarter results.

CTC Overview. Headquartered in Eagan, Minnesota, CTC specializes in occupational, physical, and speech therapy for children from birth to 18 years old. The company was founded in 1999 and has two office locations, one in Eagan and the other in Apple Valley, MN. Various disorders that are treated through CTC include motor or speech delays, sensory processing disorders, Cerebral Palsy, Autism Spectrum Disorders, and Attention Deficit Disorder.

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Ocugen (OCGN/$0.8736 | Price Target: $8)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Interim Data From The Clinical Showcase Highlighted
Rating: OUTPERFORM

Summary Of Data Announced For Products In Clinical Trials. Ocugen summarized some of the major points presented at its Clinical Showcase on November 12. As discussed in our Research Note on November 13, speakers reviewed the products’ mechanisms of action, reviewed OCU400 data from the Phase 1/2 trial, the design of the OCU400 Phase 3 liMeliGhT trial, and presented new interim data from the Phase 1/2 ArMaDa trial for OCU410.

Mechanism of Action For The Modifier Gene Therapy (MGT) Detailed. Ocugen is developing gene therapies for retinal diseases that deliver a regulatory gene to control other genes and regulate downstream pathways. Products in development are for inherited diseases that result from multiple gene mutations or conditions that result from several dysfunctional pathways.

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QuoteMedia Inc. (QMCI/$0.2 | Price Target: $0.26)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Working Through A Rough Patch
Rating: OUTPERFORM

In-line results. The company reported Q3 revenue of $4.7 million, a decrease of 1.4% from the prior year period and largely in line with our estimate of $4.8 million. Q3 adj. EBITDA of $0.4 million, was modestly lighter than our estimate of $0.7 million, as illustrated in Figure #1 Q3 Results. The adj. EBITDA miss was driven by a modestly higher cost of revenue and increased sales headcount.

Lackluster near term outlook. Management indicated that Q4 revenue will be relatively flat compared to Q3 despite a solid business pipeline. Management highlighted that it lost a significant client and that some of its clients are experiencing financial hardship, leading to a lower volume and higher bad debt expenses. We believe the company should be able to offset lower volume and the loss of clients with its building business pipeline.

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Noble Capital Markets Research Report Tuesday, November 19, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – Results Below Expectations, but Pipeline Being Realized
Comtech Telecommunications (CMTL)/MARKET PERFORM – Agreement Made with Dissident Former CEOs
GDEV Inc (GDEV)/OUTPERFORM – Raising Adj. EBITDA Estimates

Bit Digital (BTBT/$4.02 | Price Target: $5.5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Results Below Expectations, but Pipeline Being Realized
Rating: OUTPERFORM

3Q Results. Revenue of $22.7 million was lower than our and consensus estimate of $23.2 million and $25.9 million, respectively. The BTC halving resulted in lower revenue. Higher electricity costs, D&A, G&A, and a loss of $21.9 million on digital assets led to the reduced net loss of $38.8 million, or $0.26/sh, from our consensus estimate of a loss of $2.3 million, or $0.02/sh, and loss of $2.9 million, or $0.02/sh, respectively. Adjusted EBITDA was a negative $21.8 million compared to a negative $2.9 million last year.

Seizing Opportunity. After 3Q ended, Bit Digital entered into one term sheet agreement and two Master Services Agreements. Together, the three provide roughly $21 million in annual revenue once servers are fully deployed. Alongside this is the Boosteroid agreement, as management expects that to reach approximately 20% of the $700 million opportunity, or 10,000 GPUs, through the course of 2025, translating to $30 million of revenue annually.

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Comtech Telecommunications (CMTL/$2.65)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Agreement Made with Dissident Former CEOs
Rating: MARKET PERFORM

Agreement Made. Yesterday, Comtech announced it entered into a cooperation agreement with former CEOs Michael Porcelain and Fred Kornberg, along with Oleg Timoshenko (the “Investor Group”), to appoint Michael Hildebrandt to the Board of Directors. Mr. Hildebrandt was one of the nominees chosen by the Investor Group to be appointed to the Board in a 13D filing through the SEC in September 2024.

Mr. Porcelain on as Advisor. Along with the appointment of Mr. Hildebrandt, Mr. Porcelain is authorized as an advisor to the Company. He will be entitled to periodically engage in discussions with the Company and provide advice or recommendations. We believe adding Mr. Porcelain as an advisor is a positive as the former CEO has a wealth of knowledge on the Company’s end markets and its processes.

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GDEV Inc (GDEV/$25.86 | Price Target: $70)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Raising Adj. EBITDA Estimates
Rating: OUTPERFORM

Solid Q3 results. Total company revenue was $110.7 million, which beat our $103.0 million estimate by 7.4%, and adj. EBITDA of $16.9 million, substantially exceeded our estimate of $4.9 million. The adj. EBITDA beat was largely attributed to the revenue upside and modestly lower game operating and marketing expenses. The strong operating results also beat Street estimates, with consensus adj. EBITDA of $8.5 million.

Attractive outlook. While revenue outperformed our expectations, bookings were lower than expected. Management highlighted its focus on player retention and quality of play rather than short term monetization of its user base. Given that active users were down roughly 16% from the prior year period, we view the company’s focus on player retention and improving gameplay favorably.

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Noble Capital Markets Research Report Monday, November 18, 2024

Companies contained in today’s report:

Haynes International (HAYN)/MARKET PERFORM – Acquisition by North American Stainless Expected to Close Shortly
Maple Gold Mines (MGMLF)/OUTPERFORM – Recent Private Placement Provides Flexibility to Pursue a Robust Exploration Program

Haynes International (HAYN/$60.93)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Acquisition by North American Stainless Expected to Close Shortly
Rating: MARKET PERFORM

Acquisition by North American Stainless. In February, Haynes International entered into an agreement to be acquired by North American Stainless, a wholly owned subsidiary of Acerinox. North American Stainless will acquire all the outstanding shares of Haynes for $61.00 per share. The merger is conditioned on, among other things, the receipt of the approvals, clearances, or expirations of waiting periods under certain regulatory laws.

Receipt of all regulatory approvals and clearances. With the Austria waiting period expiration on November 15, all regulatory approvals and clearances where the applicable authorities have asserted jurisdiction have been obtained, including in the United States and in the United Kingdom.

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Maple Gold Mines (MGMLF/$0.04 | Price Target: $0.25)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Recent Private Placement Provides Flexibility to Pursue a Robust Exploration Program
Rating: OUTPERFORM

Private placement financing. On November 14, Maple Gold Mines closed a private placement of 32,695,384 non-flow-through (NFT) units at a price of C$0.065 per NFT unit and 35,935,000 flow-through (FT) common shares of the company at a price of C$0.08 per FT share for total gross proceeds of C$5 million. Each NFT unit consists of one common share and one-half of one common share purchase warrant. Each warrant entitles the holder to acquire one non-flow-through common share at a price per warrant share of C$0.10 until November 14, 2027.

Third quarter financial results. As an advanced exploration and development company, Maple Gold does not generate revenues and incurs expenses associated with advancing its projects. Maple Gold generated a third quarter loss of C$1.3 million or C$(0.00) per share compared to a loss of C$1.1 million or $(0.00) per share during the prior year period. We had anticipated a loss of C$1.5 million or C$(0.00) per share.

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Noble Capital Markets Research Report Friday, November 15, 2024

Companies contained in today’s report:

Comtech Telecommunications (CMTL)/MARKET PERFORM – New Contract Awarded
Conduent Inc (CNDT)/OUTPERFORM – Lowering Forecast, Business Transformation Plan Still on Track
InPlay Oil (IPOOF)/OUTPERFORM – Expecting a Strong Finish in 2024; Outlook for 2025 Remains Positive
Lifeway Foods (LWAY)/MARKET PERFORM – Year-over-Year Growth, But Below Our Expectations
PDS Biotechnology (PDSB)/OUTPERFORM – 3Q24 Reported With Phase 3 VERSATILE-003 Trial Expected To Begin In 1Q25
ZyVersa Therapeutics, Inc. (ZVSA)/OUTPERFORM – Reported 3Q24 With Clinical Trials Beginning In 2025

Comtech Telecommunications (CMTL/$2.71)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
New Contract Awarded
Rating: MARKET PERFORM

New Navy Contract. Comtech has been awarded a sole source contract from the U.S. Navy Information Warfare Systems Command for the Company’s U.S sovereign software-defined SLM-5650B satellite communications (“SATCOM”) modems, upgrade kits, firmware options and technical support. The contract is for a four-year period and valued at $50 million with roughly $2 million of funded orders received to date.

Growing Market. Comtech’s new award is indicative of the growing satellite industry, as the satellite ground station market is projected to grow to $6.6 trillion by 2028, representing a 6.89% CAGR beginning in 2024. Various government departments, such as the Department of Defense are needing agile and distributed communications systems for keeping communication open and uninterrupted, producing demand for products such as Comtech’s SATCOM modems. Furthermore, budgets for next year show growth, with an example being the U.S. Space Force from $17 billion in 2022 to a projected $30 billion in 2025. With a growing industry over the next few years and potential growing budgets, we believe that Comtech has the capability of capturing additional contracts.

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Conduent Inc (CNDT/$4.05 | Price Target: $7)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Lowering Forecast, Business Transformation Plan Still on Track
Rating: OUTPERFORM

Q3 in line. The company reported a Q3 revenue of $807 million, largely in line with our estimate of $814 million. Adj. EBITDA was $36 million, better than our estimate of $24 million. Notably, it appears that there could be tailwinds developing in the company’s Commercial segment.

Positive trends in Commercial. Adj. revenue in the Commercial segment was down 3%, due to lower volumes. However, management indicated that new business signings helped to mitigate the weakness from lost business. Moreover, it appears that momentum from new business signings is beginning to outpace lost business that is rolling off.

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InPlay Oil (IPOOF/$1.3 | Price Target: $5.25)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Hans Baldau hbaldau@noblefcm.com |
Expecting a Strong Finish in 2024; Outlook for 2025 Remains Positive
Rating: OUTPERFORM

Third quarter financial results. InPlay Oil generated third quarter net income of C$146 thousand or C$0.00 per share compared to C$9.2 million or C$0.08 per share during the prior year period. We had predicted net income in the amount of C$423 thousand or C$0.00 per share. Average quarterly production declined to 8,206 barrels of oil equivalents per day (boe/d) compared to 9,003 boe/d in the third quarter of 2023 and our estimate of 8,238 boe/d.

Corporate 2024 guidance. While InPlay has maintained its production guidance of 8,700 to 9,000 boe/d, commodity price expectations were lowered, and operating expenses are expected to be in the range of C$13.50 to C$15.50 per boe/d compared to prior guidance of C$13.00 to C$15.25 per boe/d. Capital expenditures are expected to total $63 million compared with prior guidance of C$64 million to C$67 million. Adjusted funds flow is expected to be in the range of C$70 million to C$73 million compared to previous expectations of C$80 million to C$85 million.

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Lifeway Foods (LWAY/$22.39)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Year-over-Year Growth, But Below Our Expectations
Rating: MARKET PERFORM

Another Quarter of Y-o-Y Growth. For the 20th consecutive quarter, Lifeway reported y-o-y top line growth. Revenue for the quarter totaled $46.1 million, compared to the prior year’s $40.9 million, We were a little more aggressive in our forecast, projecting revenue of $51.5 million. Gross margin of 25.7% was below the prior year’s 27.2%. Net income was $3.0 million, or $0.19 per diluted share, compared to $3.4 million, or $0.23/sh, and our estimate of $4.2 million or $0.27/sh.

Expanded Distribution. Management noted that the Company expanded its kefir distribution to South Africa in September and recently announced that it is expanding into Dubai and the Emirates market. In South Africa, the products are available on shelves now, while product availability in the Emirates is expected in the fourth quarter. We believe the Company will continue to look for new potential markets to expand its presence in stores while also expanding on its advertising in these new markets to attract the attention of new consumers.

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PDS Biotechnology (PDSB/$2.25 | Price Target: $17)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
3Q24 Reported With Phase 3 VERSATILE-003 Trial Expected To Begin In 1Q25
Rating: OUTPERFORM

Progress Toward Phase 3 With New Phase 2 VERSATILE-002 Data. PDS Biotech Reported 3Q24 loss of $10.7 million or $(0.29) per share, a slightly lower loss than we estimated. Earlier this week, modifications to the IND protocol for the Phase 3 VERSATILE-003 trial were submitted to the FDA. Approval is expected by mid-December, which would allow the trial to begin in early 2025. 

New Phase 2 VERSATILE-002 Data Analysis Shows Outcomes Were Maintained Or Improved. As additional patients complete their follow-up periods, further analysis of the data has shown improvements over the previous interim reports. The overall survival has been unchanged at 30.0 months, although the lower limit of the confidence interval has increased to 20 months. This compares with 17.9 months for published Keytruda studies. Overall response rate, complete response rate, and disease control rates have improved as well.

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ZyVersa Therapeutics, Inc. (ZVSA/$1.13 | Price Target: $20)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Reported 3Q24 With Clinical Trials Beginning In 2025
Rating: OUTPERFORM

3Q24 Reported With Product Updates. ZyVersa reported a loss of $2.4 million or $(2.43) per share and updated its clinical trial plans for the two products in development. During the quarter, several scientific papers were published showing the role of inflammation in obesity, diabetes, and neurodegeneration. These studies all support previous work by the company and are consistent with the mechanism of action for IC 100.

VAR 200 To Start Phase 2a In Diabetic Kidney Disease. The Cholesterol Efflux Mediator™ VAR 200 has shown reductions in the initial damage that starts a cycle of damage and repair that leads to progressive scarring and loss of kidney function. A Phase 2a trial enrolling patients with diabetic kidney disease (DKD) is expected to begin in 1Q25 with initial data announcement around mid-2025.

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Noble Capital Markets Research Report Thursday, November 14, 2024

Companies contained in today’s report:

Bitcoin Depot (BTM)/OUTPERFORM – Building Momentum Ahead of 2025
Cocrystal Pharma (COCP)/OUTPERFORM – 3Q24 Reported With Data Announcements Ahead
DLH Holdings (DLHC)/OUTPERFORM – A More Flexible Credit Facility
Snail (SNAL)/OUTPERFORM – Clearing Up The Noise
Unicycive Therapeutics (UNCY)/OUTPERFORM – 3Q24 Reported With Progress Driven By OLC

Bitcoin Depot (BTM/$2.48 | Price Target: $7)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Building Momentum Ahead of 2025
Rating: OUTPERFORM

Q3 beat. The company reported solid Q3 results, beating our estimates on both revenue and adj. EBITDA. Q3 revenue was $135.3 million, better than our estimate of $130.6 million and adj. EBITDA was $9.2 million, better than our estimate of $7.8 million.

Kiosk re-deployment paying off. After focusing on re-deploying underperforming kiosks during 2023 and in the first half of 2024, the company’s kiosks appear to be gaining traction. This is evident in the median transaction size, which climbed from roughly $200 in the beginning of the year to $250 in Q3. Notably, it takes time for re-deployed kiosks to be discovered by potential users. As a result, newly deployed kiosks tend to have an initial drag on profitability.

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Cocrystal Pharma (COCP/$1.77 | Price Target: $10)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
3Q24 Reported With Data Announcements Ahead
Rating: OUTPERFORM

Two Trials Expected To Report Data Shortly. Cocrystal reported a 3Q24 loss of $4.9 million or $(0.49) per share. The company made progress in its clinical programs during the quarter, including CC42344, its oral PB2 inhibitor for seasonal and pandemic influenza. We see this an increasingly important product, given the spread of a new variant of the virus known as H5N1, or the avian flu. Data from its Phase 2a human challenge study is expected before year-end.

CC-42344 Could Be Effective Against The New Bird Flu. As discussed in our Research Note on June 21, a new virulent strain of influenza known as avian flu (H5N1) had been detected in dairy cattle. Earlier this year, the first infections in dairy workers showed the virus had mutated enough to begin infecting humans. Preclinical testing with CC-42344 showed it was able to inhibit the virus and has potential for human use against the strain.

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DLH Holdings (DLHC/$8.76 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A More Flexible Credit Facility
Rating: OUTPERFORM

Credit Facility and CMOP Update. Yesterday, DLH announced the Company has amended its credit facility with lenders to modify the borrowing capacity of the facility itself and the financial covenants of the agreement. The credit facility’s maximum capacity is reduced from $70 million to $50 million with the amendment, although no changes were made to the maturity or pricing terms. We would point out that DLH also is expected to transition a portion of its CMOP locations to set-aside, small business contractors, although no further details were given.

Financial Covenants. As for the financial covenants of the agreement, the two that are specifically being changed are the Total Leverage ratio and Fixed Charge Coverage ratio. Importantly, the amendment increases the maximum threshold of the Total Leverage Ratio, with the most recent being to 4.5 to 1.0 in the first quarter next year from a prior 4.25 to 1.00. As for the Fixed Charge Coverage ratio, the minimum threshold is being lowered with the most recent staying the same at less than to 1.25 to 1.00 in the first quarter next year but lowering in subsequent quarters. While the reduction of the capacity of the facility is not ideal, we believe the changes to the covenants provides DLH flexibility in anticipation of the Company’s CMOP locations being moved to small businesses, impacting performance.

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Snail (SNAL/$1.4 | Price Target: $4)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Clearing Up The Noise
Rating: OUTPERFORM

Q3 results. The company reported revenue of $22.5 million, largely in line with our estimate of $25.0 million, and Adj. EBITDA of $0.5 million, below our estimate of $4.0 million. Notably, results benefitted from the Aberration DLC release that was included in the sale of Ark: Survival Ascended (ASA), and part 2 of Bobs Tall Tales. Importantly, the adj. EBITDA miss was a largely a function of lower revenue, given the amount of fixed licensing expenses in its cost structure.

DLC release outlook. With the release of the Aberration DLC in September, there are three DLC packages that were included in the sale of ASA that have yet to be released. The next DLC is expected in Q4 and two more are expected in 2025. Importantly, as DLC packages included in ASA are released, the company will defer less revenue from ASA sales, which should provide investors with a clearer picture of company operating results. 

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Unicycive Therapeutics (UNCY/$0.47 | Price Target: $7)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
3Q24 Reported With Progress Driven By OLC
Rating: OUTPERFORM

OLC Achieved Significant Milestones In 3Q24. Unicycive reported a 3Q24 loss of $4.1 million or $(0.05) per share. During the quarter, the NDA was submitted for approval of oxylanthanum carbonate (OLC), its phosphate binder for patients on renal dialysis. After the close of the quarter, the acceptance for filing was announced with a PDUFA date of June 28, 2025. The quarter ended with $32.3 million in cash, which we believe is sufficient to fund operations and launch of OLC in 2025-26.

NDA Submission Was Completed As Expected. In early September, Unicycive submitted the new drug application (NDA) for OLC, its phosphate binder for patients on renal dialysis. On November 11, the company announced FDA acceptance of the application for review and assigned a PDUFA date of June 28, 2025. This is the statutory date for the FDA to answer the application with Market Approval or a denial known as a Complete Response Letter (CRL).

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Noble Capital Markets Research Report Wednesday, November 13, 2024

Companies contained in today’s report:

Aurania Resources (AUIAF)/OUTPERFORM – Black Sands Beach Project in Corsica is Taking Shape
Direct Digital Holdings (DRCT)/MARKET PERFORM – Building Back Better
FreightCar America (RAIL)/OUTPERFORM – Stock Price Decline May Offer an Attractive Entry Point for Investors
GeoVax Labs (GOVX)/OUTPERFORM – 3Q24 Reported With Continued Flow Of Good News
Ocugen (OCGN)/OUTPERFORM – Ocugen Clinical Showcase Highlights Fundamentals, Clinical Data, and Patient Stories
SKYX Platforms (SKYX)/OUTPERFORM – Seeding Future Revenue Growth
V2X (VVX)/OUTPERFORM – AIP Selling More Shares

Aurania Resources (AUIAF/$0.37 | Price Target: $0.65)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Black Sands Beach Project in Corsica is Taking Shape
Rating: OUTPERFORM

New assay results. Aurania received preliminary results from studies conducted by SGS Laboratories on a sample of magnetic sand taken from Nonza Beach, Corsica. The nickel-bearing mineral in the black magnetic sand is indeed awaruite, a natural nickel-iron alloy. SGS was able to isolate a nearly pure awaruite concentrate from the magnetic sand using a combination of grinding and flotation. New assays of awaruite flotation concentrate yielded 71.4% nickel, 0.98% cobalt, 0.65% copper, 0.58 grams of gold per tonne, 0.09 grams of platinum per tonne, and 0.39 grams of palladium per tonne. The flotation method recovered 83.8% of the nickel contained in the magnetic sand, which had a head grade of 6% nickel. Studies of identical sands at nearby Albo Beach are underway.

Extraction and processing. Aurania hired IHC Mining Advisory Services (IMAS) to identify the best means to extract and recover the black beach sands at Albo-Nonza. IHC proposed two different scenarios focused on the extraction of heavy minerals containing nickel and iron. The preferred scenario uses a floating suction and cutter-head dredge on floating pontoons. IMAS estimated the capital cost of the cutter suction dredger scenario to be €13 million, including €7.8 million for the dredging equipment and €5.2 million for a processing plant.

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Direct Digital Holdings (DRCT/$2.64)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Building Back Better
Rating: MARKET PERFORM

Weak Q3 Results, likely the trough. Q3 revenues declined 85% to $9.1 million, with a decline in both its Buy-side and Sell-side businesses, down 12% and 96%, respectively. Adj. EBITDA was a negative $2.8 million. Management blamed the weak fundamentals on a business disruption caused by a “false and disproven” blog post by Adalytics, which it sued for defamation. Notably, the Q3 results puts the company back on track on its financial reporting under its new auditor BDO. 

Guidance anticipates a strong revenue rebuild. Management anticipates rebound in revenues as one of its largest clients rebuilds volume. We expect strong sequential Q4 revenue to $14.5 million, up from $9.1 million in Q3. Full year 2024 revenue is expected to be $67.7 million, with full year 2024 adj. EBITDA loss of $8.6 million. Management anticipates strong full year 2025 revenue growth to a range of $90 million to $110 million. 

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FreightCar America (RAIL/$10.17 | Price Target: $14.75)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Stock Price Decline May Offer an Attractive Entry Point for Investors
Rating: OUTPERFORM

Third quarter financial results. FreightCar America generated third quarter adjusted net income to common stockholders of $2.455 million or $0.08 per share compared to $3.953 million or $0.13 per share during the prior year period. We had anticipated adjusted net income to common stockholders of $2.465 million or $0.07 per share. Average shares outstanding of 31.4 million were lower than our estimate of 34.5 million. Revenue and rail car deliveries increased to $113.3 million and 961, respectively, compared to $61.9 million and 503 during the third quarter of 2023. On a year-over-year basis, adjusted EBITDA increased to $10.9 million compared to $3.5 million during the prior year period and our estimate of $9.8 million. Free cash flow amounted to $5.7 million.

Full year 2024 corporate guidance. While guidance for revenue and rail car deliveries is unchanged, management narrowed its guidance range for EBITDA to $37.0 million to $39.0 million compared to previous expectations of $35.0 million to $39.0 million.

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GeoVax Labs (GOVX/$3.25 | Price Target: $10)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
3Q24 Reported With Continued Flow Of Good News
Rating: OUTPERFORM

3Q24 Report Reviews Progress During The Quarter. GeoVax reported a loss of $5.8 million or $(0.91) per share. The quarter included first revenues from its BARDA contract for the Project NextGen Phase 2b trial testing CM04S1 as a preventive vaccine for COVID-19. The company gave updates and data timeframes for clinical trials with CM04S1, MVA, and Gedeptin. During the quarter, it raised $13.5 million and ended with a cash balance of $8.6 million on September 30, 2024.

Gedeptin Trial Design Announced. GeoVax announced that the Phase 2 trial in head and neck squamous cell carcinoma (HNSCC) will test Gedeptin in combination with an immune checkpoint inhibitor (ICI) in recurrent patients before surgery. A single-cycle of Gedeptin will be given with a standard dose of Keytruda (pembrolizumab), followed by a second cycle of Keytruda alone, then surgery. Endpoints will include standard measures of response, tumor shrinkage, and survival that would make the data comparable to other treatments. The trial is expected to begin in 1H25.

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Ocugen (OCGN/$1.02 | Price Target: $8)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Ocugen Clinical Showcase Highlights Fundamentals, Clinical Data, and Patient Stories
Rating: OUTPERFORM

Ocugen Held A Meeting With Scientists, Doctors, and Patients. On November 12, Ocugen held a Clinical Showcase meeting to present the scientific basis of its Gene Modifier technology, interim data updates from its clinical trials, and allow patients to discuss their experiences with the treatments.

First OCU410 Data Shows Efficacy. The Phase 2 ArMaDa trial is testing OCU410 in Geographic Atrophy (GA), a lesion in patients with dry age-related macular degeneration that leads to blindness. The presentations included its four mechanisms of action and the clinical outcomes from the initial patient cohorts in the dose-escalation stage of the trial. These data at 6 months compare favorably to approved complement inhibitors for GA.

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SKYX Platforms (SKYX/$1.26 | Price Target: $5)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Seeding Future Revenue Growth
Rating: OUTPERFORM

Q3 results. The company reported Q3 revenue of $22.2 million and an adj. EBITDA loss of $2.6 million. While the revenue was slightly below our estimate of $24.1 million, the adj. EBITDA loss was milder than our estimate of $3.4 million.

Gaining traction with Home Depot. Since announcing the partnership in July, the company’s presence in Home Depot locations has expanded to 100 stores. Additionally, SKYX products are available on Home Depot’s website. We anticipate more SKUs to become available both online and in stores soon, as a wide variety of SKYX products are expected to arrive from the company’s manufacturing partner, Ruee Appliances.  

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V2X (VVX/$67.69 | Price Target: $72)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
AIP Selling More Shares
Rating: OUTPERFORM

Round 2. American Industrial Partners (AIP) is selling another trance of VVX shares, this time 2.5 million shares with up to an additional 375,000 shares to be sold. As we noted in AIP September’s stock sale, we had expected AIP eventually to begin to sell off its stake, so we are not surprised with this additional sale. V2X will not receive any proceeds from the sale. The additional float is a positive for investors, in our view.

Ownership. Upon the completion of this offering, investment funds affiliated with AIP will beneficially own approximately 44.9% of V2X’s outstanding common stock, or 14,167,286 shares (or approximately 43.7% if the underwriters exercise their option to purchase additional shares in full).

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Noble Capital Markets Research Report Monday, November 11, 2024

Companies contained in today’s report:

Bowlero (BOWL)/OUTPERFORM – Developing More Legs To Its Growth Story
Graham Corp (GHM)/OUTPERFORM – Strong 2Q25 Results; Raising PT to $45
Gray Television (GTN)/OUTPERFORM – An Uncharacteristic Miss
Information Services Group (III)/OUTPERFORM – Building Up for Growth in 2025
Kratos Defense & Security (KTOS)/OUTPERFORM – Reports 3Q24 Results; Raising PT to $30
Ocugen (OCGN)/OUTPERFORM – 2Q24 Reported As We Look Forward To Clinical Showcase Data
The GEO Group (GEO)/MARKET PERFORM – Moving to Market Perform as Shares Skyrocket
Zomedica Corp. (ZOM)/OUTPERFORM – Improving Pet Health and Veterinary Practices – Initiating Coverage With An Outperform Rating

Bowlero (BOWL/$11.5 | Price Target: $17.5)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Developing More Legs To Its Growth Story
Rating: OUTPERFORM

Solid start. The company reported fiscal Q1 results that were better than expectations. Notably, revenue increased 14.4% from the prior year period to $260.2 million, and adj. EBITDA of $62.9 million grew 20.7% from the prior year period. The favorable results were driven by strategic initiatives in the Food & Beverage segment and the inclusion of Raging Waves operating results in the quarter. Furthermore, we believe the results are indicative of positive operating momentum, which could see enhanced growth prospects from M&A activity. 

Food & Beverage leads. The company’s Food & Beverage segment revenue increased by 17.5% from the prior year period and catalyzed the strong quarter. Notably, management highlighted that the increase in Food & Beverage revenue was due to its strategic efforts, not price increases. Furthermore, there appears to be room for growth through enhanced menu options.

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Graham Corp (GHM/$39.07 | Price Target: $45)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Strong 2Q25 Results; Raising PT to $45
Rating: OUTPERFORM

2Q25 Results. Graham’s 2Q25 results exceeded expectations. The Company reported strong sales growth in its markets, along with exceptional execution throughout the business, which drove meaningful margin expansion. The balance sheet remained stellar with $32.3 million of cash and no debt. Graham raised full year gross margin and adjusted EBITDA estimates. GHM shares reacted favorably to the news, rising 17% to $39.07.

Financials. Record quarterly revenue of $53.6 million, up 19% y-o-y. Defense revenue was up 23%, Chemical/Petro sales were up 23%, and Space revenue was up 23%. Gross margin improved 790 basis points to 23.9%, fueled by sales growth and execution. Adjusted EBITDA rose 150% to $5.6 million. Adjusted net income up 353% to $3.4 million, or $0.31

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Gray Television (GTN/$4.28 | Price Target: $20)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
An Uncharacteristic Miss
Rating: OUTPERFORM

Misses Q3 expectations. Q3 revenue of $950.0 million was below our $1.02 billion estimate, with the largest variance due to lower than expected Political advertising and weaker core advertising. Political was $173.0 million versus our $200.0 million estimate. Q3 adj. EBITDA of $322.0 million was lower than our $396.0 million estimate. Figure #1 Q3 Results illustrate our estimates versus reported results. 

Disappointing Political outlook. Management indicated that Q4 Political advertising will be in the range of $248 million to $253 million and in the range of $495 million to $500 million for the full year 2024, well below our $380 million and $652 million estimate, respectively. The shortfall appears to be due to a shift in spending for Senate and House races into more competitive markets which were outside of Gray’s footprint. 

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Information Services Group (III/$3.35 | Price Target: $5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Building Up for Growth in 2025
Rating: OUTPERFORM

More Profitable. Topline performance at $61.3 million was lower sequentially, however, it was above management’s guidance of $60-$61 million and higher than our estimate of $61 million. Importantly, the quarter resulted in a record high utilization of 77%, leading towards a higher gross margin of 40.4% from 39.5% last quarter. The higher gross margin flowed through to higher adjusted EBITDA margin of 11.6% from 11.1% in the prior quarter.

Potential Growth in 2025. Management noted that the ISG Tango platform is continuing to see growth in its contract value, now at $5 billion compared to $4 billion last quarter, a 25% increase. Notably, the increase is an example of signs of increased demand in the U.S. and we believe the market will improve as the election uncertainty has passed and the macroeconomy continues to improve.

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Kratos Defense & Security (KTOS/$25.97 | Price Target: $30)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Reports 3Q24 Results; Raising PT to $30
Rating: OUTPERFORM

Environment. The ongoing generational recapitalization of strategic weapon systems, including strategic satellites, air defense radar, and missile systems, continues to be a catalyst for Kratos. Current world events are driving demand for Kratos products, including target drones, which are used to exercise and test air defense systems.

Strong Engine. Kratos’ turbine technologies and engine business is generating record results, including having a record opportunity pipeline with hypersonic supersonic cruise missiles, loitering munitions drones, and space systems, all being expected future growth areas.  

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Ocugen (OCGN/$0.9862 | Price Target: $8)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
2Q24 Reported As We Look Forward To Clinical Showcase Data
Rating: OUTPERFORM

Clinical Trials Continued, Capital Was Raised, and New Data Expected. Ocugen reported a loss for 3Q24 of $13.0 million or $(0.05) per share. The company reported continued enrollment in all of its ongoing clinical trials and has scheduled a Clinical Showcase meeting in New York on Tuesday, November 12, 2024. We expect the meeting presentations to include data updates from the clinical trials. In August, Ocugen completed a stock offering that raised $35 million to end 3Q24 with $38.7 million in cash. After the quarter ended, the company added $30 million in debt funding. 

OCU400 in Retinitis Pigmentosa (RP) Is On Schedule. The company confirmed that the Phase 3 liMeliGhT (pronounced “Limelight”) trial continues to enroll patients and is on schedule to complete enrollment in 1H25. An approval by Health Canada will allow patient enrollment at up to 5 Canadian sites. The FDA has approved an expanded access program (EAP) to allow patients  to be treated outside of the clinical trials before OCU400 receives market approval.

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The GEO Group (GEO/$25.36)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Moving to Market Perform as Shares Skyrocket
Rating: MARKET PERFORM

Below Expectations. The GEO Group reported third quarter 2024 results below management’s and our expectations. Results in the quarter were driven by lower-than-expected revenues in the Electronic Monitoring and Supervision Services segment, reflecting reduced participant count. ICE populations have remained relatively flat over the past three quarters, although they are up y-o-y.

3Q24. GEO reported total revenues for the third quarter 2024 of $603.1 million compared to $602.8 million last year. We forecasted $612 million. Adjusted EBITDA was $118.6 million, flat with 3Q23. We were at $128 million. Net income for 3Q24 totaled $26.3 million, or $0.19 per diluted share, compared to $24.5 million, or $0.16 per diluted share, for 3Q23. Adjusted EPS was $0.21 per diluted share compared to $0.19 per diluted share for 3Q23. We had projected $0.25 and $0.26, respectively.

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Zomedica Corp. (ZOM/$0.12 | Price Target: $0.25)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Improving Pet Health and Veterinary Practices – Initiating Coverage With An Outperform Rating
Rating: OUTPERFORM

Initiating Coverage of Zomedica Corp. With An Outperform Rating. We are initiating coverage of Zomedica, a company that makes and sells veterinary therapeutic devices and diagnostics. These products are used to diagnose and treat animals ranging from horses to cats, dogs, and other pets. Veterinarians use these products to improve the outcome and quality of care for the pet as well as to streamline workflow and profitability of their practice.

Zomedica Has Made Several Acquisitions To Build Its Product Lines Zomedica has grown by acquiring complementary businesses that broaden its product line and leverage its existing infrastructure. It has five product lines in therapeutic devices and diagnostics, two fast-growing segments of the animal health market. These products are marketed by its own sales force and commercial partnerships. We expect near-term growth to come from the introduction of new internally-developed applications that increase uses and grow sales of existing products.

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Noble Capital Markets Research Report Friday, November 8, 2024

Companies contained in today’s report:

Cadrenal Therapeutics (CVKD)/OUTPERFORM – Cadrenal Reports 3Q24 With Tecarfarin Progress Updates
CoreCivic, Inc. (CXW)/MARKET PERFORM – Another Solid Quarter
GoHealth, Inc. (GOCO)/OUTPERFORM – The Pieces are in Place; Poised for a Strong AEP
Information Services Group (III)/OUTPERFORM – A Look into the Third Quarter
Kelly Services (KELYA)/OUTPERFORM – Reports 3Q24 Results
Kratos Defense & Security (KTOS)/OUTPERFORM – First Look at 3Q24 Results
Lifeway Foods (LWAY)/MARKET PERFORM – In Danone’s Corner
Saga Communications (SGA)/OUTPERFORM – Resilient Amidst Economic Headwinds
Schwazze (SHWZ)/OUTPERFORM – Reports Preliminary 3Q24 Results
Townsquare Media (TSQ)/OUTPERFORM – Digital Revenue Gains Momentum

Cadrenal Therapeutics (CVKD/$16.29 | Price Target: $45)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Cadrenal Reports 3Q24 With Tecarfarin Progress Updates
Rating: OUTPERFORM

Financial Condition Improved In 3Q24. Cadrenal reported a loss of $2.4 million or $(2.18) per share, adjusted for the 1-for-15 reverse split on August 20, 2024. This loss was slightly less than our projections. Cash on September 30 was $4.4 million, excluding financing that brought in $9.8 million after the close of the quarter. The company reported that its current cash balance was approximately $11.3 million on November 7, 2024.

The Tecarfarin Made Progress In Its Next Indication. Cadrenal held a Type-B meeting with the FDA to discuss the planned Phase 3 trial for use of tecarfarin in patients with left ventricular assist devices. The company will use the guidance and comments from the meeting to design the pivotal trial. Cadrenal also continued to discuss collaborating with Abbott about a clinical trial with patients that have the Abbott HeartMate 3, the only LVAD available in the United States. Cadrenal has Orphan Drug designation for the LVAD indication, providing a strong incentive for collaborations.

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CoreCivic, Inc. (CXW/$22.08)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Another Solid Quarter
Rating: MARKET PERFORM

3Q24 Results. CoreCivic’s financial results for the third quarter of 2024 demonstrated the Company’s continued strong operating momentum. Increased occupancy and higher per diems drove the increased revenue in the quarter. While ICE populations were relatively stable in the quarter, management did note populations have increased by 5% since the beginning of October. Operating margin increased compared with the prior-year quarter through continued cost management and strong demand for CXW’s services.

Opportunity. Obviously, with the coming change in the President, most industry observers expect to see a step change in the use of services provided by the industry. There also is significant opportunity at the state and local levels being driven by increasing jail populations, forecasts for prison population’s to rise over the next five years, ongoing staffing issues, and an aging physical stock.

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GoHealth, Inc. (GOCO/$11.78 | Price Target: $22)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
The Pieces are in Place; Poised for a Strong AEP
Rating: OUTPERFORM

Q3 beat. The company reported Q3 revenue of $118.3 million and an adj. EBITDA loss of $12.1 million, better than our estimates of $104.0 million and a loss of $14.1 million, respectively. Notably, the company benefited from improved efficiency with declines in direct costs of policy submissions and strong agent productivity.

Prepared for AEP. In our view, the company is well positioned heading onto this year’s Annual Enrolment Period (AEP) with several technological enhancements that drive favorable customer experiences and agent productivity. Using AI based tools, such as Plan GPT, the company has reduced its average call time from 90 minutes to 67 minutes. We believe the company could make additional incremental efficiency enhancements in Q4 and beyond, which could lead to more volume and margin improvement.   

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Information Services Group (III/$3.33 | Price Target: $5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A Look into the Third Quarter
Rating: OUTPERFORM

Hitting the Top of Revised Guidance. ISG reported revenue and net income at the top end of the Company’s revised guidance and in-line with our estimates. Revenue for the quarter was $61.3 million, which while down 15% from last year, was slightly above our estimate of $61 million. Net income was $1.1 million, or EPS of $0.02, beating out our estimate of $0.2 million or flat EPS.

Rising Client Demand. Management noted that ISG Tango now includes over $5 billion of contract value, up from $4 billion in the previous earnings release. Management is seeing signs that client demand in the U.S. is on the rise, translating to higher spending. We believe that the rise in contract value offers a sign towards higher spending on projects.

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Kelly Services (KELYA/$18.14 | Price Target: $27)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Reports 3Q24 Results
Rating: OUTPERFORM

Challenges. In the third quarter, Kelly remained focused on what it could control, but the uncertain economic environment persisted, impacting consolidated results. On an organic basis, revenue rose in two of the business units, while gross profit rate fell in three of the four units. Integration costs related to the MRP acquisition of $6.1 million also impacted results. Investors reacted negatively to the results, sending the shares down 18% to $18.14.

3Q24 Results. Revenue of $1.038 billion, down 7.1% y-o-y, but essentially flat on an organic basis. We were at $1.075 billion, the same as the consensus. Adjusted EBITDA of $26.2 million, up 2.7% y-o-y, but below our $34 million estimate and consensus $33 million. Net income of $0.8 million, or $0.02/sh and adjusted EPS of $0.21, compared to $0.18 and $0.50 in 3Q23. 

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Kratos Defense & Security (KTOS/$23.82 | Price Target: $26)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
First Look at 3Q24 Results
Rating: OUTPERFORM

Solid Quarter. Kratos reported a solid quarter, with Unmanned Systems reporting 8.7% organic revenue growth. Turbine Technologies, Microwave Products, C5ISR, Defense  Rocket Support, and Training Solutions businesses also all reported organic revenue growth. This was offset by the previously reported and expected decline of approximately  $24.2 million in the Space and Satellite business, primarily resulting from the industry related impact from OEM delays.

3Q24 Results. Kratos reported revenue of $275.9 million, flat with the same period last year. We had estimated $280 million. Adjusted EBITDA was $24.6 million, compared to $27.7 million last year and our $21 million estimate. Reported net income was $3.2 million, or $0.02/sh, up from a $1.6 million loss, or a loss of $0.01/sh in 3Q23. Adjusted EPS was $0.11 compared to $0.12 last year. We were at $0.01 and $0.06, respectively.

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Lifeway Foods (LWAY/$25)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
In Danone’s Corner
Rating: MARKET PERFORM

Support for Danone. In response to Lifeway’s rejection of the Danone offer to acquire the Company, yesterday, Edward and Ludmila Smolyansky released a statement stating, among other things, “we strongly support Danone’s offer, which represents a substantial premium over Lifeway’s recent share price and reflects their confidence in the growing U.S. kefir market…” They go on to say, “As we approach one of most significant and closely watched earnings releases in Lifeway’s history, we remain optimistic about the company’s potential and believe that Danone’s proposal presents a unique opportunity to enhance value for all shareholders.”

Ownership. According to their most recent amended 13D filing dated August 14th, Edward and Ludmila may be deemed to be the beneficial owners of an aggregate of 4,332,451 shares of common stock, representing approximately 29.3% of the outstanding shares of common stock. This includes 500,000 shares (3.3% of the outstanding) held in a trust of which Edward and Julie each own 50%. Danone owns 3,454,756 shares representing 23.4% of the outstanding. Together, Danone and the Smolyansky’s control over 50% of the outstanding, even if we split the 500,000 trust shares equally. 

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Saga Communications (SGA/$13.9 | Price Target: $24)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Resilient Amidst Economic Headwinds
Rating: OUTPERFORM

Q3 results. The company reported Q3 revenue of $28.1 million and adj. EBITDA of $3.6 million, both of which were in line with our estimates of $28.7 million and $3.6 million, respectively. Notably, the company ended an unprofitable relationship with a digital services provider, which contributed to digital revenue growth slowing to 3.2% in Q3. While we anticipate this will make year-over-year digital revenue comparisons difficult in the short term, we believe the company’s digital segment offers a favorable growth outlook.

Q4 outlook. Management indicated that Q4 revenue is pacing down low to mid-single digits, highlighting a difficult advertising market that is feeling the effects of the high interest rate environment. Furthermore, operating expenses on a same station basis are guided to increase in the range of 3% – 5% over the prior year period. We anticipate this increase will largely be attributed to investments in the company’s digital growth initiatives.

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Schwazze (SHWZ/$0.15 | Price Target: $4)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Reports Preliminary 3Q24 Results
Rating: OUTPERFORM

Preliminary 3Q24 Results. Last night, Schwazze reported preliminary 3Q24 results. We believe the ongoing audit of past results is likely causing a delay in reporting results. According to the release, 3Q24 revenue is expected to be approximately $42 million, and adjusted EBITDA is expected to be approximately $11 million. In 3Q23, Schwazze reported revenue of $46.7 million and adjusted EBITDA of $14.1 million. We had estimated revenue of $44.5 million and adjusted EBITDA of $10.3 million.

Making Progress. In spite of the challenging operating environment, Schwazze continued to generate momentum from its retail growth and optimization initiatives in the quarter, reflected by the Company once again outpacing two highly competitive markets while generating sequential improvements in profitability and positive cash flow from operations. Management noted increased store traffic in both Colorado and New Mexico.

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Townsquare Media (TSQ/$10.15 | Price Target: $21)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Digital Revenue Gains Momentum
Rating: OUTPERFORM

In line quarter. Total company revenues of $115.3 million was roughly flat with the year earlier period and in line with our $115.0 million estimate. Q3 adj. EBITDA was $25.5 million versus our $26.5 million estimate. Notably, the results were in line with the company’s previous guidance. 

Digital revenue accelerates. Total digital revenue swung positive in the latest quarter, up 1.1%, the first time since q2 2023. The revenue improvement was led by its Ignite business (up 4.7%) and a significant moderation in the revenue decline at Townsquare Ignite (down 5.8%, much better than down 12.9% in Q2). Management indicated that Ignite’s Q4 revenue growth should triple to near 15% and Interactive should swing positive. 

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Noble Capital Markets Research Report Thursday, November 7, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – Steady Production in October
Conduent Inc (CNDT)/OUTPERFORM – Q3 in Line: More Divestitures to Come?
CoreCivic, Inc. (CXW)/MARKET PERFORM – Solid 3Q24 Results – A First Look
Seanergy Maritime (SHIP)/OUTPERFORM – Third Quarter Financial Results Exceed Our Estimates
The ODP Corporation (ODP)/OUTPERFORM – Accelerating B2B Pivot

Bit Digital (BTBT/$4.1 | Price Target: $5.5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Steady Production in October
Rating: OUTPERFORM

AI Revenue In-line. As of October 31, Bit Digital had 256 servers actively generating revenue and earned approximately $4.3 million of unaudited revenue during the month, in-line with the prior month. With the recent agreement signed with Boosteroid, we expect an uptick in revenue in the coming months.

Mining Business. The Company produced 52.2 BTC in the month, a 1.4% increase from 51.5 BTC in September. The active hash rate was 2.43 EH/s, flat with the prior month. In our view, management is continuing to take an opportunistic approach to mining, with additional miner acquisitions based on appropriate returns on invested capital.

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Conduent Inc (CNDT/$4.13 | Price Target: $7)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Q3 in Line: More Divestitures to Come?
Rating: OUTPERFORM

Q3 in line. The company reported a solid Q3 with revenue that was largely in line with our estimate and adj. EBITDA that was better than expected. Revenue of $807 million compared with our estimate of $814 million and adj. EBITDA of $36 million compared with our estimate of $24 million, illustrated in Figure #1 Q3 Results.

Revenue trends should improve. Adj. revenue, which excludes divested business units, was down in each of the 3 segments and down roughly 8% overall. In the company’s largest segment, Commercial, adj. revenue was down 3%, due to lower volumes. Importantly though, new business signings helped to mitigate the weakness and new business momentum is expected to continue for the remainder of the year.

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CoreCivic, Inc. (CXW/$17.58)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Solid 3Q24 Results – A First Look
Rating: MARKET PERFORM

Solid Results and a Favorable Reaction. CoreCivic reported above expected 3Q24 results, driven by higher compensated occupancy and continued cost management. Notably, the results were achieved even with the headwinds of CalCity and South Texas, which resulted in ICE revenue declining 3.4% y-o-y. Excluding the South Texas facility, ICE revenue rose 10.9% y-o-y. CXW shares reacted favorably to the election results, rising nearly 30% to close at $17.58 yesterday.

Third Quarter Detail. Total revenue was at $491.6 million (including $5.7 million of deferred revenue related to South Texas), above our forecast of $479.5 million and above last year’s $483.7 million. Occupancy rates increased to 75.2% from 72.0% in the prior year. Operating margin improved 130 basis points y-o-y, reflecting the increased top line and cost control. Adjusted EBITDA was $83.3 million, up from $75.2 million. Net income was $21.1 million, or $0.19 per diluted share, compared to $13.9 million or $0.12 last year. Adjusted EPS was $0.20 versus $0.14 last year. We estimated net income of $10 million or $0.09 per diluted share.

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Seanergy Maritime (SHIP/$9.42 | Price Target: $12)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Hans Baldau hbaldau@noblefcm.com |
Third Quarter Financial Results Exceed Our Estimates
Rating: OUTPERFORM

Third quarter financial results. The company reported third quarter adjusted EBITDA and earnings per share (EPS) of $26.8 million and $0.69, respectively, exceeding our estimates of $25.5 million and $0.61. Revenue was $1.1 million above our estimate, while expenses were only modestly higher. The variance to our net revenue estimate is attributed to lower commissions and greater fees from related parties. Operating income was $17.7 million compared to our estimate of $17.0 million. 

Updating estimates. We are lowering our 2024 adjusted EBITDA and EPS estimates to $101.7 million and $2.52, respectively, from our previous estimates of $102.1 million and $2.56. Additionally, we are lowering our 2025 adjusted EBITDA and EPS estimates to $93.7 million and $1.93, respectively, from $102.0 million and $2.39. The revisions are mainly due to lower time charter equivalent (TCE) rates and more dry-docking days in 2025, resulting in lower operating days and net revenue than previously estimated.

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The ODP Corporation (ODP/$27.57 | Price Target: $35)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Accelerating B2B Pivot
Rating: OUTPERFORM

3Q24 Results. Weak macroeconomic and business conditions resulted in challenging performance in the quarter. Third quarter revenue of $1.78 billion declined 11% y-o-y. Adjusted operating income was $41 million, down from $112 million in 3Q23. Adjusted EBITDA fell to $62 million from $138 million. ODP reported adjusted net income from continuing operations of $24 million, or EPS of $0.71, versus $85 million, or EPS of $2.17, in the same period last time.

Accelerating the Pivot. Given the recent operating challenges, ODP is accelerating its B2B pivot. The Company is leveraging its differentiated core strengths to pivot towards higher growth B2B opportunities. Recent contract wins, including a 10-year $1.5 billion contract with a reseller organization and a new contract with one of the world’s largest social media-focused e-commerce companies, are reflective of these efforts.

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Noble Capital Markets Research Report Wednesday, November 6, 2024

Companies contained in today’s report:

Commercial Vehicle Group (CVGI)/OUTPERFORM – Post 3Q Call Commentary
DLH Holdings (DLHC)/OUTPERFORM – New Contract Award
Great Lakes Dredge & Dock (GLDD)/OUTPERFORM – Strong Results Continue
Lifeway Foods (LWAY)/MARKET PERFORM – Rejects Danone; Implements Poison Pill

Commercial Vehicle Group (CVGI/$2.4 | Price Target: $8)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Post 3Q Call Commentary
Rating: OUTPERFORM

Cost Reduction Efforts. CVG has eliminated approximately 1,200 roles or roughly 15% of the organization’s workforce from continuing operations compared to the prior year through both restructuring and ongoing continuous improvement efforts. We believe these actions will create a lower cost, more efficient, and agile company positioned for future success.

Markets Remain Challenged. Both Class 8 truck sales and the Ag/Construction end markets remain soft. In 2025, current forecasts call for a relatively flat Ag/Construction market, while the Class 8 market will likely begin to turn up in the second half of the year.

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DLH Holdings (DLHC/$8.69 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
New Contract Award
Rating: OUTPERFORM

New Award. DLH has been awarded a contract to support the Naval Information Warfare Center Atlantic’s (“NIWC Atlantic”) Tactical Networks. NIWC Atlantic conducts research, development, and engineering to bolster integrated information warfare capabilities, with an emphasis on Enterprise IT systems.

Details. The award has a total value of approximately $76 million, comprised of $61 million in initial firm value and $15 million in optional services. The contract term includes up to a five-year period of performance. As the prime contractor, DLH will perform In-Service Engineering Agent and Integrated Logistics Support services. DLH’s work will support the missions of several C5ISR program offices and systems including PEO-C4I, PMW-160, NAVWAR, NAVSEA, and others.

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Great Lakes Dredge & Dock (GLDD/$11.61 | Price Target: $14)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Strong Results Continue
Rating: OUTPERFORM

Strong Results. Revenue for the quarter was up $74 million from last year to $191.2 million, beating our estimate of $185 million. Continued strong results from the Company’s capital and coastal protection projects contributed to the growth. Gross margin improved from 7.7% to 19.0%. Net income totaled $8.9 million, or EPS of $0.13, from a net loss of $6.2 million or $0.09/sh last year. Adjusted EBITDA increased to $27 million from $5.3 million last year.

Net Income. We would note reported net income was negatively impacted by two events we, and we believe other analysts had not included in their estimates. First, the Company moved forward a dry docking into the third quarter to take advantage of the recent strong awards and second, the impact of incentive comp taken in the quarter. Together, these two items increased expenses by an estimated $5-$6 million in the quarter.

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Lifeway Foods (LWAY/$24.84)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Rejects Danone; Implements Poison Pill
Rating: MARKET PERFORM

Rejects Danone. Yesterday, Lifeway Foods announced its Board of Directors rejected the unsolicited proposal made by Danone North America PBC to acquire all the shares of Lifeway that it does not already own for $25.00 per share. According to the Board, Danone’s proposal substantially undervalues Lifeway. Lifeway shares rose on the news, indicating investors may believe an improved offer may materialize.

Adopts Poison Pill. In addition, the Company adopted a Rights Plan that becomes exercisable if an entity, person, or group acquires beneficial ownership of 20% or more of the outstanding shares of Lifeway common stock in a transaction not approved by the Board or if an entity, person or group that currently beneficially owns 20% or more of the outstanding shares of Lifeway common stock acquires any additional shares. Unless earlier redeemed, terminated, or exchanged pursuant to the Rights Plan, the rights will expire on November 4, 2025.

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Noble Capital Markets Research Report Tuesday, November 5, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – Agreement Signed with Boosteroid
Bowlero (BOWL)/OUTPERFORM – Keeping The Ball Rolling
Commercial Vehicle Group (CVGI)/OUTPERFORM – Reports 3Q24 Results
E.W. Scripps (SSP)/OUTPERFORM – Debt Overshadows Record Quarter
FAT Brands (FAT)/OUTPERFORM – Files Form 10-12b Registration Statement for Planned Listing of Twin Hospitality Group
MAIA Biotechnology (MAIA)/OUTPERFORM – SITC Late Breaking Presentation To Update Phase 2 THIO Data
SelectQuote (SLQT)/OUTPERFORM – Tailwinds Appear Underway
V2X (VVX)/OUTPERFORM – Record Quarterly Results

Bit Digital (BTBT/$3.37 | Price Target: $5.5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Agreement Signed with Boosteroid
Rating: OUTPERFORM

MSA Signed. Yesterday, Bit Digital announced that the Company executed its Master Service Agreement (MSA) with Boosteroid Inc. This follows the previously signed binding term sheet with Boosteroid in August 2024. Importantly, the MSA is a five-year term and the Company has placed an initial purchase order of 300 GPUs for its servers.

Performance Impact. The purchase order translates to approximately $4.6 million over five years, or $0.9 million annualized. Management noted that the GPUs are expected to be delivered and begin earning revenue by the end of November. The GPUs will be installed in U.S. datacenters, with management noting there are another 600 GPUs in the pipeline for European datacenters. With the Enovum datacenter fully leased, the machines will go into third party locations, at least in the short-term.

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Bowlero (BOWL/$10.38 | Price Target: $17.5)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Keeping The Ball Rolling
Rating: OUTPERFORM

Off to a good start. Fiscal Q1 end Sept. results were better than expectations. Revenues were $260.2 million versus our $240.0 million estimate. Adj. EBITDA was $62.9 million versus our $59.0 million estimate. The key revenue upside driver was a solid performance in Food & Beverage, up a strong 17.3% y-o-y and beating our estimate by a solid 10.7%. Figure #1 Q1 Results highlight the quarter versus our estimates. 

Raises low end of fiscal 2025 guidance. Management increased its total revenue guidance for fiscal 2025 by $10 million on the low end of its previous guidance range of $1.22 billion to $1.28 billion, now $1.23 billion to $1.28 billion. The guidance implies attractive mid-single digit to 10% plus year over year revenue growth. Adj. EBITDA margins are expected to be 32% to 34%, or adj. EBITDA between $390 million to $430 million. 

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Commercial Vehicle Group (CVGI/$3.08 | Price Target: $8)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Reports 3Q24 Results
Rating: OUTPERFORM

Another Challenging Quarter. Third quarter revenue decreased 15.3% to $171.8 million from $202.9 million in the prior year. Operating loss was $1.1 million and adjusted operating loss was $0.4 million, down from operating and adjusted operating income of $8.9 million last year. Net loss was $0.9 million, or $0.03/sh, and adjusted net loss totaled $0.4 million, or $0.01/sh, compared to net income of $4.7 million, or $0.14/sh. Adjusted EBITDA was $4.3 million, down 64.8%. Note: results from the sold Cab Structures and Industrial Automation businesses have been reclassified to discontinued operations.

Soft Customer Demand. Continuing from the second quarter, the agricultural and construction end markets have had softer demand, impacting the Electrical Systems segment. The Vehicle Solutions and Aftermarket & Accessories segments also experienced decreased customer demand, alongside a lower margin business phase out and a reduced backlog, respectively. 

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E.W. Scripps (SSP/$2.27 | Price Target: $10)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Debt Overshadows Record Quarter
Rating: OUTPERFORM

Solid Q3 results. The company reported revenue of $646.3 million and adj. EBITDA of $176.8 million, both of which were record highs. Notably, the quarter was driven by strong political revenue of $125.2 million, which exceeded expectations. Furthermore, the company was able to capitalize on the influx of high-margin political revenue and pay down $115 million of debt in the quarter.

Record political advertising. The company generated $125.2 million in political revenue for Q3, a record high, and increased its full year political revenue guidance from $270 million – $290 million to a minimum of $340 million. The company’s increased 2024 political revenue guidance reflects a roughly 30% increase over its highest political advertising year, 2020.

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FAT Brands (FAT/$5.32 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Files Form 10-12b Registration Statement for Planned Listing of Twin Hospitality Group
Rating: OUTPERFORM

Form 10-12b. FAT Brands filed a Form 10-12b with the SEC. The Form 10-12b contains a preliminary information statement about the planned distribution to FAT Brands’ common shareholders of approximately 5% of the Class A Common Stock of Twin Hospitality Group and its planned listing on Nasdaq as an independent publicly traded company.

Unlocking Value. The filing of the Form 10 Registration Statement is an important milestone in unlocking value and growth opportunities for Twin Hospitality Group and the Twin Peaks brand, while continuing to generate long-term value for FAT Brands shareholders, in our view. The Company expects to complete the separation later this year.

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MAIA Biotechnology (MAIA/$2.88 | Price Target: $14)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
SITC Late Breaking Presentation To Update Phase 2 THIO Data
Rating: OUTPERFORM

Interim Update From Phase 2 Trial Scheduled For SITC. MAIA is scheduled to present a data update from the ongoing THIO-001 trial at a Late-Breaker session of the STIC (Society For The Immunotherapy of Cancer) Annual meeting on Saturday, November 9. The presentation could include data on endpoints and measures of efficacy such as disease control rate, overall survival, and median survival with additional patients and longer treatment times.

Trial Treats Patients With THIO and A Checkpoint Inhibitor. The THIO-001 trial enrolled advanced non-small cell lung cancer (NSCLC) patients that had progressive disease and no longer responded after two or more standard-of-care therapy regimens. Patients were treated with the combination of 3-week cycles of THIO and the standard dose of cemiplimab (350 mg Libtayo, an anti-PD-1 checkpoint inhibitor from Regeneron). Patient enrollment was completed in February 2024.

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SelectQuote (SLQT/$2.03 | Price Target: $5)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Tailwinds Appear Underway
Rating: OUTPERFORM

Solid FY Q1 results. The company reported fiscal Q1 revenue growth of 26% to $292.3 million, better than our estimate of $275.1 million. Margins were also better than we anticipated; an adj. EBITDA loss of $1.7 million was significantly better than our estimate of a loss of $6.6 million.  

Agents performing well. The company has a high concentration of tenured agents, who performed well in the quarter. A combination of efficient marketing and strong close rates primarily led to the better-than-expected revenue and profitability. Importantly, we believe the demonstrated strength of the company’s tenured agent force and strong consumer engagement this Annual Enrollment Period (AEP) could result in an impressive upcoming fiscal Q2 for the Senior segment.

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V2X (VVX/$61.91 | Price Target: $72)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Record Quarterly Results
Rating: OUTPERFORM

A Record Quarter. Record revenue, net income, and adjusted EBITDA were driven by the Company’s alignment to well funded, critical missions. V2X’s full spectrum capabilities across the mission lifecycle continue to serve as a differentiator. We believe there remains additional opportunity for V2X through further optimization of the business, including enhancing the breadth and depth of the pipeline.

3Q24 Results. Revenue rose 8% to $1.08 billion, with continued double digit growth in the Indo-Pacific and Middle East areas. Reported operating income was $49.9 million and adjusted operating income totaled $76.9 million, versus $21.0 million and $59.5 million, respectively, last year. Adjusted EBITDA rose to $82.7 million from $64.7 million. V2X reported EPS was $0.47 and adjusted EPS was $1.29, compared to a loss of $0.21/sh and EPS of $0.73, respectively, in the third quarter last year.

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Noble Capital Markets Research Report Monday, November 4, 2024

Companies contained in today’s report:

ACCO Brands (ACCO)/OUTPERFORM – 3Q Post Call Commentary
Aurania Resources (AUIAF)/OUTPERFORM – Setting Up for the 2025 Drilling Program
Century Lithium Corp. (CYDVF)/OUTPERFORM – Focus and Execution
Comtech Telecommunications (CMTL)/MARKET PERFORM – Releases Full Year Results; Removes “Interim” Tag From CEO
Cumulus Media (CMLS)/MARKET PERFORM – Revenue Visibility Still Murky

ACCO Brands (ACCO/$5.26 | Price Target: $12)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
3Q Post Call Commentary
Rating: OUTPERFORM

Green Shoots. In the third quarter, ACCO experienced growth across each of its segments. This was the second consecutive quarter of growth in computer accessories, which can be attributed to an improving demand environment as well as new product launches in gaming accessories. Growth was fueled by the successful rollout of new products as well as international expansion efforts.

Cash Flow. Following the historic pattern, ACCO generated significant cash flow in the quarter. CFFO in the quarter totaled $95.5 million, with CFFO for the nine month period totaling $96 million. On a year-to-date basis, CFFO is up $25 million. Free cash flow for the quarter totaled $89 million and is $87 million year-to-date. Free cash flow is up $26 million from the same period last year, reflecting improved working capital. Management continues to project full year free to be approximately $130 million.

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Aurania Resources (AUIAF/$0.5 | Price Target: $0.65)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Setting Up for the 2025 Drilling Program
Rating: OUTPERFORM

Kuri-Yawi geophysical survey. Aurania commenced an induced polarization (IP) geophysical survey over its Kuri-Yawi gold target where the discovery of numerous sinters in 2018 revealed the area to be highly prospective for epithermal gold mineralization. Kuri-Yawi is the most advanced epithermal target at the company’s Lost Cities-Cutucu project in southeastern Ecuador and may represent the quickest path for a successful outcome based on work that has already been completed, along with easy access. In 2020 and 2021, nine scout holes were drilled that indicated a vector to mineralization toward the northeast which is the focus of the IP survey.

Preparing for the 2025 drilling program. The IP survey is designed to identify deep conductors that could correspond to gold mineralization, and to target drill holes for the planned program in 2025. The IP survey is expected to be completed by mid-December 2024, with results expected in early 2025 following a review and interpretation of the data.

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Century Lithium Corp. (CYDVF/$0.38 | Price Target: $2.35)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Focus and Execution
Rating: OUTPERFORM

Lithium carbonate production at the pilot plant. Century Lithium has successfully produced battery-quality lithium carbonate at its Angel Island lithium project pilot plant and demonstrated it has an end-to-end process to produce lithium carbonate. The pilot plant utilizes the Company’s patent-pending process for chloride leaching combined with direct lithium extraction (DLE). Management is now focused on process optimization to reduce the project’s estimated capital and operating costs, along with advancing environmental studies, permitting, and project funding.

Progress on the environmental and permitting front. Century Lithium has completed a draft hydrological model and a draft Plan of Operations Additionally, Century has identified potential alternative locations for water supply closer to the project within its water rights permit to optimize resource usage.

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Comtech Telecommunications (CMTL/$2.91)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Releases Full Year Results; Removes “Interim” Tag From CEO
Rating: MARKET PERFORM

4Q24 Results. Revenue totaled $126.2 million, down sequentially and down from $148.8 million in 4Q23. We were at $130 million. Gross margin fell to 21.5% from 32.6% a year ago and was below our 30.8% estimate. Adjusted EBITDA was $0.3 million versus $18.9 million in 4Q23. Driven by $64 million of impairment charges, Comtech reported a 4Q24 net loss of $100.6 million, or a loss of $3.48/sh versus a loss of $5.3 million, or $0.19/sh in 4Q23.

Going Concern Still. Although we were hopeful the “Going Concern” designation would go away following the refinancing, it remains. According to the 10-K, “the Company has suffered recurring losses and negative cash outflows from operations, and may be unable to maintain compliance with financial covenants required by its credit agreement that raise substantial doubt about its ability to continue as a going concern.”

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Cumulus Media (CMLS/$0.94)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Joshua Zoepfel jzoepfel@noblefcm.com |
Revenue Visibility Still Murky
Rating: MARKET PERFORM

In-line Q3 results. The company reported revenue of $203.6 million and adj. EBITDA of $24.1 million, in-line with our estimates of $203.3 million and $24.8 million, respectively. Its digital businesses, now 20% of total revenues, was the highlight of the quarter, up 7.5% from the prior year. Political advertising was a little softer than expected, $4.4 million versus our $5.5 million estimate. 

National/Network remains lackluster. National advertising is over 50% of total company revenues and carries very high margins. A recovery in National/Network will be key toward improved company fundamentals. Management indicated that National advertisers appear to be hesitant to spend, possibly

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Noble Capital Markets Research Report Friday, November 1, 2024

Companies contained in today’s report:

1·800·Flowers.com, Inc. (FLWS)/OUTPERFORM – A Slow Start, But On Track Toward Growth
ACCO Brands (ACCO)/OUTPERFORM – 3Q24 First Look
Eledon Pharmaceuticals (ELDN)/OUTPERFORM – Islet Cell Transplant Results Are A Breakthrough For Diabetes
Haynes International (HAYN)/MARKET PERFORM – Lowering Estimates to Reflect Anticipated Negative Revenue Impact of Boeing Strike
NN Inc (NNBR)/OUTPERFORM – Accelerating on its Transformation

1·800·Flowers.com, Inc. (FLWS/$8.32 | Price Target: $14)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
A Slow Start, But On Track Toward Growth
Rating: OUTPERFORM

Q1 results. The company reported Q1 revenue of $242.1 million, 3% lower than our estimate of $249.7 million. Adj. EBITDA loss of $27.9 million was below our estimate of negative $23.5 million. The lackluster results were partially attributed to roughly $3 million in wholesale revenue being pushed into Q2. A bright spot in Q1 was the effective management of input costs, which contributed to a gross margin improvement of 20 basis points from the prior year period.

Positioned for revenue growth. In our view, the company is positioned to benefit from several favorable developments, including expanded product offerings, a growing same-day delivery footprint and effective cost management of input prices. We believe that revenue trends should improve in coming quarters as inflation trends moderate and the general economy improves. 

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ACCO Brands (ACCO/$4.9 | Price Target: $12)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
3Q24 First Look
Rating: OUTPERFORM

3Q24. ACCO is beginning to see the fruits of its cost reduction and infrastructure initiatives with 3Q24 results in line with expectations and overall sales trends improving in the third quarter compared to the first half of the year. Gross margin expanded by 20 basis points-the seventh consecutive quarter of improvement-and SG&A costs were down 7% y-o-y. 

Details. Revenue of $420.9 million was down 6% on a reported basis y-o-y, with comp sales off 5%, reflecting softer back-to-school demand as well as for certain office products, although technology accessories saw growth. We had projected revenue of $418 million. Reported operating income was $26.3 million. Adjusted operating income was $44.7 million, down from $46 million in 3Q23. GAAP net income was $9.3 million, or $0.09/sh, with adjusted net income of $22.5 million, or $0.23/sh. In 3Q23, ACCO reported net income of $14.9 million, or $0.15/sh, and adjusted net income of $23.1 million, or $0.24/sh. We were at $0.15/sh and $0.24/sh, respectively.

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Eledon Pharmaceuticals (ELDN/$4.65 | Price Target: $10)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Islet Cell Transplant Results Are A Breakthrough For Diabetes
Rating: OUTPERFORM

Islet Cell Transplant Patients Achieve Insulin Independence. A clinical study using tegoprubart as an immunosuppressant in islet cell transplantation was presented at a medical meeting on Tuesday, October 29, 2024. The first two subjects receiving islet cell transplants with tegoprubart as an immunosuppressant were able to regulate their blood glucose and achieve insulin independence. We see this as a significant advance that could enable islet cell transplantation to become a treatment for diabetes.

Tegoprubart Prevented The Toxicities That Have Led To Failure. Previous attempts to transplant healthy islet cells to restore insulin production have been unsuccessful. This is partly due to side effects of tacrolimus, the immunosuppression drug that is effective but toxic to the kidney and islet cells. This trial used tegoprubart instead of tacrolimus, resulting in islet cells surviving, engrafting, and producing insulin at effective levels.

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Haynes International (HAYN/$60.36)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Lowering Estimates to Reflect Anticipated Negative Revenue Impact of Boeing Strike
Rating: MARKET PERFORM

Boeing strike. In fiscal year 2023 and for the first nine months of fiscal 2024, aerospace represented 49% and 51% of Haynes’ net revenue. A significant portion of the company’s aerospace sales are dependent on the number of aircraft built by The Boeing Company and Airbus. On September 13, Boeing union members went on strike after rejecting a contract proposal from the company. Boeing has extended a pause on component shipments for several of its programs. While we are hopeful that the strike will be resolved soon, we expect it to have a negative impact on Haynes’ fourth quarter of fiscal year 2024 which ended September 30 and the first quarter of fiscal year 2025 which ends on December 31, 2024. Seasonally, the first quarter of the fiscal year is generally the company’s weakest.

Updating estimates. We have lowered our 2024 EBITDA and EPS estimates to $67.4 million and $2.46, respectively, from $68.5 million and $2.52. The revisions reflect weaker demand in the aerospace segment and lower sales expectations for the fourth quarter. Our expectations for weaker demand extend into fiscal year 2025, and we have lowered our EBITDA and EPS estimates to $82.5 million and $3.35, respectively, from $99.5 million and $4.15. Our revisions reflect lower shipment, revenue, and margin expectations, particularly during the first half of the year.

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NN Inc (NNBR/$3.15 | Price Target: $6)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Accelerating on its Transformation
Rating: OUTPERFORM

Adjusted Results. Adjusted net loss during the quarter was $2.5 million, or $0.05 per share compared to adjusted net income of $0.1 million or $0.01 last year. Adjusted EBITDA was $11.6 million, or a margin of 10.2%, compared to last year’s $14.5 million or 11.6%. Both items were impacted by the Company’s rationalization of plants undergoing turnarounds and the sale of the Lubbock plastic plant operations.

Accelerated Transformation. Management has been accelerating its transformation initiatives, as the Company continues to win business, nearing the lower end of guidance for the year, and is continuously undergoing cost reduction, including $2 million in annualized cost savings enacted in the third quarter. New business wins bring over higher margins for NN at over 20% compared to the legacy business at around 11%, providing higher gross margins overtime as legacy contracts become more offset.

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Noble Capital Markets Research Report Thursday, October 30, 2024

Companies contained in today’s report:

FAT Brands (FAT)/OUTPERFORM – Challenged Operational Results; But Moving Forward With Value Creation
NN Inc (NNBR)/OUTPERFORM – A First Look at the Third Quarter
Perfect Corp (PERF)/OUTPERFORM – Developing Additional Revenue Growth Catalysts

FAT Brands (FAT/$5.34 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Challenged Operational Results; But Moving Forward With Value Creation
Rating: OUTPERFORM

Overview. FAT Brands 3Q24 results were below our expectations, mostly due to underperformance at the Smokey Bones brand. Development deals continued strongly, although new store openings are below plan as franchisees have taken a more conservative stance on new openings. Management continues to move forward with value creation efforts, specifically with Twin Peaks, and is hopeful of announcing additional developments in the coming weeks.

3Q24 Results. Revenue of $143.3 million was up 31.1% y-o-y but was down from $152 million reported in 2Q24. We had estimated $159.9 million. Adjusted EBITDA totaled $14.1 million, down from $21.9 million in 3Q23 and $15.7 million in 2Q24. FAT Brands reported a net loss of $44.8 million, or $2.74/sh, compared to a net loss of $24.7 million, or $1.59/sh, last year. We had forecasted a net loss of $32 million, or $1.88/sh.

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Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A First Look at the Third Quarter
Rating: OUTPERFORM

Focused on Business Wins and Costs. NN is continuing to achieve business wins with $15 million in new business wins in the quarter, totaling $49 million year-to-date, near the bottom of its $55-70 million range for the year. The Company’s transformation program is moving faster than anticipated, as evidenced by the new business growth, along with operational efficiency and structural cost reductions. An example of the latter being the previous sale of the plastics plant in July and closure of the Dowagiac plant to move operations to China, further lowering costs.

3Q Results. Third quarter results were slightly below expectations with net sales of $113.6 million, below last year’s $124.4 million and our estimate of $125 million, due to the sale of the Lubbock operations. Excluding the sale, rationalized volume at plants undergoing turnarounds, and a customer settlement, sales were down 0.5%. Adjusted EBITDA was $11.6 million, down from $14.5 million last year and our $13.9 million estimate. With decisions such as the plant closure and higher margins of new business, we expect improved performance in the short term.

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Perfect Corp (PERF/$1.86 | Price Target: $5)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Developing Additional Revenue Growth Catalysts
Rating: OUTPERFORM

Strong Q3 results. The company demonstrated attractive 11% revenue growth in Q3 with revenue of $16.1 million, slightly better than our estimate of $15.7 million. Adj. EBITDA and adj. net income for the quarter were both better than our expectations, due to lower-than-expected marketing, G&A, and R&D expenses.

Revenue drivers. The company’s B2C segment drove Q3 revenue growth, while the B2B segment revenue was more flat, as some of the company’s enterprise clients have faced economic challenges. Importantly, the company’s B2C web-based offering should bolster B2C revenue growth. As for B2B, interest rate cuts should have a positive impact on clients’ enterprise software budgets. Moreover, the company could increase contract values through new services, such as Perfect GPT.  

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Noble Capital Markets Research Report Wednesday, October 30, 2024

Companies contained in today’s report:

GDEV Inc (GDEV)/OUTPERFORM – Q3 Preview: Upside Surprise Potential
Perfect Corp (PERF)/OUTPERFORM – B2C Drives Q3 Beat

GDEV Inc (GDEV/$37.69 | Price Target: $70)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Q3 Preview: Upside Surprise Potential
Rating: OUTPERFORM

Q3 preview. We estimate the company’s upcoming Q3 revenue and adj. EBITDA to be $103.0 million and $4.9 million, respectively. There is the prospect for an upside surprise, however, particularly for adj. EBITDA. We believe that the company’s ongoing strategy for improving operational efficiency could be reflected in this quarter. The company is expected to report Q3 results in the second week in November. 

Enhancing efficiency. During the company’s Q2 earnings call, management highlighted its focus on efficiency in its user acquisition strategy. We believe the company’s efficient use of marketing spend, particularly in areas that provide sufficient returns, could indicate upside surprise potential for adj. EBITDA, not only from our estimate, but also the Street consensus which is $8.5 million. 

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Perfect Corp (PERF/$1.88 | Price Target: $5)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
B2C Drives Q3 Beat
Rating: OUTPERFORM

Q3 beat. Perfect Corp. reported better-than-expected Q3 results. The company reported Q3 revenue of $16.1 million, slightly better than our estimate of $15.7 million. Adj. EBITDA of $1.2 million and adj. net income of $3.2 million were also better than our estimates of a loss of $0.3 million and a gain of $1.6 million, respectively. Figure #1 Q3 Results highlights how the performance compared with our forecast.  

B2C leading the way. Management noted that the company’s B2C segment was the key revenue growth driver in the quarter. Moreover, the company is poised to capitalize on an expanding B2C opportunity set with a web-based service offering. Notably, web-based services offer higher margins than the company’s mobile app offerings, due to the lack of Android and iOS app store fees.

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Noble Capital Markets Research Report Tuesday, October 29, 2024

Companies contained in today’s report:

Alliance Resource Partners (ARLP)/OUTPERFORM – Third Quarter Results Negatively Impacted by Operational Challenges

Alliance Resource Partners (ARLP/$25.5 | Price Target: $28)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Third Quarter Results Negatively Impacted by Operational Challenges
Rating: OUTPERFORM

Third quarter financial results. Alliance reported third quarter EBITDA and earnings per unit (EPU) of $170.7 million and $0.66, respectively, compared to $227.6 million and $1.18 during the prior year period. We had forecast adjusted EBITDA of $220.5 million and $0.82, respectively. Revenue declined 3.6% to $613.6 million because of lower coal sales prices which declined 2.1% due in part to lower export pricing in Appalachia. Operating expenses increased 13.5% due to a longwall move and challenging mining conditions at all three Appalachia operations that reduced recoveries and increased costs. The partnership also experienced a $2.3 million loss related to its equity investment in Francis Energy.

Adjusting estimates. We have lowered our 2024 EBITDA and EPU estimates to $760.1 million and $3.25, respectively, from $813.6 million and $3.60. Our estimates reflect lower coal sales and higher segment adjusted EBITDA expense per ton. Additionally, we have modestly lowered our 2025 EBITDA and EPU estimates to $831.7 million and $3.40, respectively, from $835.2 million and $3.43. 

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Noble Capital Markets Research Report Thursday, October 24, 2024

Companies contained in today’s report:

FreightCar America (RAIL)/OUTPERFORM – Raising Price Target Based on Higher Revenue and Margin Growth Expectations
The ODP Corporation (ODP)/OUTPERFORM – A Varis Sale
Travelzoo (TZOO)/OUTPERFORM – Acceleration In Growth Expected In 2025

FreightCar America (RAIL/$12.73 | Price Target: $14.75)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Raising Price Target Based on Higher Revenue and Margin Growth Expectations
Rating: OUTPERFORM

Pure play manufacturer. FreightCar America, Inc. is a diversified manufacturer of railroad cars and rail car components. The company designs and manufactures a broad variety of railroad car types for the transportation of bulk commodities and containerized freight products primarily in North America. The company reported strong second-quarter financial results and appears poised for greater scale and margin expansion as it increases its market share and expands its product suite.

On the path to greater profitability. While the company has broadened and diversified its product portfolio, we expect further growth into new areas such as producing tank cars which is expected to support margin expansion. Growth in the conversion and rebody business, along with increased parts sales, could enhance gross margins and reduce the company’s top-line sensitivity to the cyclicality associated with new railroad car orders. Additionally, we think FreightCar America will continue to improve its cost profile through productivity and efficiency gains.

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The ODP Corporation (ODP/$30.9 | Price Target: $35)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Jacob Mutchler jmutchler@noblefcm.com |
A Varis Sale
Rating: OUTPERFORM

A Sale. The ODP Corporation reported that on October 18, 2024, the Company sold its Varis Division to an affiliate of Arising Ventures. The Company did not release the terms of the agreement. We expect to see additional detail on the Company’s third quarter earnings call.

Details. ODP is retaining a minority interest of 19.9% after the sale. Under the terms of the agreement, the Company will fund up to $4 million of expenses that Varis may incur following the transaction date until December 31, 2025, and has no further obligations to contribute capital to Varis. The terms of the sale did not result in a materially different impact on the Company’s financial statements than previously estimated.

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Travelzoo (TZOO/$14.6 | Price Target: $18)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Joshua Zoepfel jzoepfel@noblefcm.com |
Acceleration In Growth Expected In 2025
Rating: OUTPERFORM

Steady as she goes. Third quarter results were in line with our estimates, with revenue of $20.1 million (down 2.4% year over year), versus our estimate of $20.9 million. Adj. EBITDA was $4.6 million (up 19.3% year over year), better than our estimate of $3.8 million by almost 21% due to lower than expected sales & marketing expenses.

Swing toward revenue growth. Advertising revenue was down slightly to $19.7 million from $20.0 million in Q2, with membership revenue up from $1.2 million in Q2 to $1.4 million in Q3. The membership revenue increase reflected improved subscriptions with Jack’s Flight Club, which was expanded into Canada. 

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Noble Capital Markets Research Report Wednesday, October 23, 2024

Companies contained in today’s report:

Comstock Inc. (LODE)/OUTPERFORM – Making Significant Progress on Multiple Fronts
EuroDry (EDRY)/OUTPERFORM – Expecting Weak Third Quarter Financial Results but a Strong Finish to the Year
Euroseas (ESEA)/OUTPERFORM – Raising Estimates on New Vessel Deliveries and Charters

Comstock Inc. (LODE/$0.488 | Price Target: $2.5)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Making Significant Progress on Multiple Fronts
Rating: OUTPERFORM

Pending transaction with SBC Commerce. Comstock recently executed an indicative term sheet for $325 million, or $315 million net of transaction fees, in funding through SBC Commerce LLC (SBCC), a U.S. based private equity group. The transaction is contingent on final due diligence and applicable regulatory approvals and is expected to close in tranches over the next several months. When the transaction was announced, it contemplated SBCC taking equity ownership positions in each business unit commensurate with the amount of its investment. Increasingly, it appears that a portion of the transactions could include debt which could have implications for our valuation which is currently based on the terms summarized in the original release. 

Third quarter 2024 achievements. Comstock achieved significant milestones during the third quarter, including executing an exclusive license and cooperative research and development agreement with the Department of Energy’s National Renewable Energy Laboratory, executing an international license agreement for three industry scale fuel hubs, recording first revenues from the sale of recycled aluminum and announcing new contracts with new customers for the decommissioning and disposal of solar panels.

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EuroDry (EDRY/$19.48 | Price Target: $29)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Hans Baldau hbaldau@noblefcm.com |
Expecting Weak Third Quarter Financial Results but a Strong Finish to the Year
Rating: OUTPERFORM

Updating estimates. We lowered our 2024 net loss and loss per share estimates to $(2.3) million and $(0.85), respectively, from $(1.8) million and $(0.65). Our revisions were driven by an increase in dry-docking expenses during the third quarter and modestly lower average shipping rates. While we are forecasting a third quarter loss, we expect a relatively strong fourth quarter. We forecast 2025 EBITDA and EPS of $37.3 million and $5.65, respectively.

Market fundamentals. The outlook for the remainder of 2024 remains positive, particularly in the Capesize market which is expected to benefit from Atlantic iron ore and bauxite exports. Rates for Panamax and smaller vessels are expected to remain stable at current rates. Disruptions in the Red Sea have caused re-routing of vessels around Africa which have increased ton-miles. In 2025, bulker earnings may be impacted by outcomes of the Red Sea situation and global economic growth and infrastructure spending, particularly with respect to China.

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Euroseas (ESEA/$43.74 | Price Target: $67)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Hans Baldau hbaldau@noblefcm.com |
Raising Estimates on New Vessel Deliveries and Charters
Rating: OUTPERFORM

New Time Charter Contracts: Euroseas executed new time charter contracts for three feeder vessels, M/V Tender Soul, M/V Dear Panel, and M/V Symeon P. All three contracts are for a minimum period of 34 months and a maximum period of 36 months at a rate of $32,000/day. The charter for M/V Tender Soul is considerably higher than its previous $17,000 and is expected to take effect in early to mid-December. M/V Dear Panel and M/V Symeon P. are the last two of the company’s nine-vessel newbuilding program and are expected to be delivered at the beginning of January 2025. These charters are expected to contribute about $79 million of EBITDA for the minimum contract period, increasing the company’s 2025 coverage to roughly 63%.

Picking its sweet spot. The company has made it a point to build out its fleet with a focus on smaller feeder vessels, insulating itself from historical growth in the industry orderbook. Furthermore, Euroseas has invested in eco-friendly vessels as the market continues to push for more environmental regulations. We believe these new profitable charters highlight the success of this two-pronged strategy. 

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Noble Capital Markets Research Report Tuesday, October 22, 2024

Companies contained in today’s report:

Direct Digital Holdings (DRCT)/MARKET PERFORM – A Pretty Big Reset

Direct Digital Holdings (DRCT/$2.61)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
A Pretty Big Reset
Rating: MARKET PERFORM

Getting back on track. The company made a substantial step forward by becoming current on its filings. On Tuesday, October 15th, it reported full year 2023, first quarter 2024, and second quarter 2024 results. The delay in its filings was due to the resignation of the company’s previous auditor, Marcum.

Issues unrelated to the audit. During the first half of the year, the company’s Sell-side revenue was disrupted when its largest client paused service, which coincided with a lawsuit with an activist shareholder. The client subsequently reconnected to the company’s SSP, but volumes have not yet fully recovered. This severely disrupted Q2 results and appears will have a lingering effect for the balance of the year.

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Noble Capital Markets Research Report Monday, October 21, 2024

Companies contained in today’s report:

Perfect Corp (PERF)/OUTPERFORM – An AI Company Positioned to Accelerate Revenue Growth

Perfect Corp (PERF/$1.94 | Price Target: $5)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
An AI Company Positioned to Accelerate Revenue Growth
Rating: OUTPERFORM

Initiating coverage with Outperform rating. We are initiating coverage on Perfect Corp., an AI technology company, with an Outperform rating and $5 price target. The prospect of additional interest rate cuts should lead to an improving environment for the company to grow its enterprise client base, leading to enhanced revenue growth and improving margins. 

Seizing B2B and B2C opportunities. The company’s AI and AR technology powers its market leading virtual try-on service, used by beauty brands and retailers alike for skincare products and makeup. The company also leverages its technology to offer a suite of products direct to consumers through its apps. These include capabilities like AI-enhanced photo editing and generative AI.

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Noble Capital Markets Research Report Friday, October 18, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – Refining Third Quarter Estimates
Comtech Telecommunications (CMTL)/MARKET PERFORM – Announces Transformation into Pure Play Satellite and Space Communications Company
SelectQuote (SLQT)/OUTPERFORM – Debt Reduction Strategy Becomes Tangible

Bit Digital (BTBT/$3.88 | Price Target: $5.5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Refining Third Quarter Estimates
Rating: OUTPERFORM

Management Comments. We had an opportunity to speak with management to further refine our go forward projections following the Enovum acquisition announcement. Management noted the mining business continues to be impacted post halving with reduced BTC production. Bit Digital mined 165.5 BTC in 3Q24, down from 244.2 BTC in 2Q24 and 410.7 BTC in 1Q24. For its GPU Cloud Services, management provided no new update on the Boosteroids contract or on its key customer and has seen roughly steady income throughout the third quarter. We had anticipated additional deployments under the key customer contract in 2024.

New Estimates. With the comments made from management, we refined our estimates to reflect the operating environment on both the segments. The lower BTC production results in a drop in 3Q24 mining revenue to $10.3 million from a prior $13.5 million, while our GPU segment revenue falls to $12.5 from a prior $18 million. For the third quarter, we now estimate total revenue of $23.2 million from our prior model of $31.9 million. Net loss is now $2.5 million or a loss of $0.02/sh from a prior estimate of net income of $1.5 million or $0.01/sh. Adj. EBITDA is now $6.7 million down from $10.6 million. For the year, we estimate total revenue of $120.5 million, down from our prior $133.2 million, net income of $37.5 million or EPS of $0.30, down from $42.1 million or $0.33, and adj. EBITDA of $78.7 million, down from $82.8 million.

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Comtech Telecommunications (CMTL/$3.54)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Announces Transformation into Pure Play Satellite and Space Communications Company
Rating: MARKET PERFORM

Transformation. Last night, Comtech issued a press release announcing its Board of Directors and management team are executing a strategy to transform Comtech into a pure-play satellite and space communications company and provided a capital structure update.

Strategic Alternatives. A key element of the plan is the potential sale of the Company’s Terrestrial & Wireless Networks business. According to the Board, “given the strength and value we see in our T&W segment, we initiated a process to explore strategic alternatives for this business to unlock value for Comtech shareholders.” If T&W can fetch peer group type multiples, this business segment alone would be worth well in excess of Comtech’s current enterprise value, in our view.

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SelectQuote (SLQT/$2.1 | Price Target: $5)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Debt Reduction Strategy Becomes Tangible
Rating: OUTPERFORM

De-levering effort takes a step forward. On October 15, the company completed its previously announced securitization of a portion of its commission receivables, resulting in $100 million of newly issued securitized notes. With the proceeds, the company is paying down $100 million of its existing term loans. Importantly, the company also extended the maturities of the balance of its term loans to late 2027 (previously maturing in early 2025).

Attractive financing option. The average effective interest rate on the newly issued securitized loans is roughly 8.5%, significantly better than the company’s term loan effective rate (nearly 15%). Moreover, the newly created asset backed securities are investment grade and the company could offer the product to third-party asset managers in the future. Given that it has roughly $1 billion in commission receivables, we believe securitization is a powerful debt reduction tool for the company

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Noble Capital Markets Research Report Thursday, October 17, 2024

Companies contained in today’s report:

Alliance Resource Partners (ARLP)/OUTPERFORM – ARLP To Report Third Quarter Financial Results on October 28
Bitcoin Depot (BTM)/OUTPERFORM – 3Q24 Preview: Fine Tuning Estimates
Comtech Telecommunications (CMTL)/MARKET PERFORM – NT 10-K, Fourth Quarter Challenged
Tonix Pharmaceuticals (TNXP)/OUTPERFORM – NDA Filing Submission For Tonmya Beats Expected Timeframe

Alliance Resource Partners (ARLP/$24.94 | Price Target: $28)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
ARLP To Report Third Quarter Financial Results on October 28
Rating: OUTPERFORM

Crude oil and natural gas prices. Because ARLP has hedge-free exposure to commodity prices within its oil and gas royalty business, we revised our model to reflect updated commodity prices. We have revised our 2024 average crude oil and natural gas price estimates to $75.97 per barrel and $2.37 per Mcf, respectively, from $77.66 and $2.32. Our average 2025 crude oil and natural gas price estimates were lowered to $68.41 per barrel and $3.17 per Mcf from $71.39 and $3.22. 

Updating estimates. We have trimmed our 2024 EBITDA and EPS estimates to $813.6 million and $3.60, respectively, from $816.1 million and $3.61. Our 2025 EBITDA and EPS estimates were lowered to $835.2 million and $3.43, respectively, from $841.0 million and $3.47. Beyond hedge-free exposure to crude oil and natural gas, ARLP’s ownership of bitcoin may also influence results. As of June 30, Alliance owned 452 bitcoins. On June 30, the price of a bitcoin closed at $62,678.29 compared to $63,329.50 on September 30. The bitcoin price closed at $67,640.84 on October 16. While there is a futures market, we generally do not try to predict the price of bitcoin or how many coins the partnership may sell during any given quarter.

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Bitcoin Depot (BTM/$1.53 | Price Target: $7)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
3Q24 Preview: Fine Tuning Estimates
Rating: OUTPERFORM

Tweaking Q3 forecast. In anticipation of the company’s upcoming Q3 release, we are fine tuning our forecast, by tweaking down our Q3 revenue forecast from $134.0 million to $130.6 million, but maintaining our adj. EBITDA estimate of $7.8 million, as illustrated in Figure #1 Q3 Forecast Revisions.

A conservative approach. Our revision reflects the very near term adverse revenue impact from new kiosks. The company should add 900 kiosks in the second half of 2024. Installed kiosks typically ramp up volume and revenues over a 6 to 9 month period. We are taking a conservative approach to the revenue generation of newly installed kiosks. 

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Comtech Telecommunications (CMTL/$4.39)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
NT 10-K, Fourth Quarter Challenged
Rating: MARKET PERFORM

NT 10-K. Yesterday, after the market close, Comtech filed with the Securities & Exchange Commission a Form 12b-25 disclosing the Company will not be filing its 10-K annual statement in a timely manner. In addition, management noted it anticipates a significant change in its fiscal 2024 GAAP results, primarily due to lower-than-expected performance during its fiscal fourth quarter.

4Q24 Performance. According to the filing, the Company anticipates a significant change in its fiscal 2024 GAAP results of operations, as compared to fiscal 2023, primarily due to lower-than-expected performance during its fourth quarter of fiscal 2024 in its Satellite and Space Communications segment, including non-cash impairment charges related to goodwill associated with the segment and long-lived assets pertaining to its steerable antenna operations located in the United Kingdom. The aggregate non-cash impairment charge is estimated to range between $60.0 million and $70.0 million.

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Tonix Pharmaceuticals (TNXP/$0.16 | Price Target: $4)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
NDA Filing Submission For Tonmya Beats Expected Timeframe
Rating: OUTPERFORM

NDA Submission Starts The FDA Review Clock. Tonix announced that it has submitted the New Drug Application (NDA) for Tonmya, its proprietary formulation of cyclobenzaprine hydrochloride for treating fibromyalgia. As discussed in our Research Note on October 11, this is slightly ahead of our expected timeframe of late October.

NDA Acceptance May Be Received Before YE2024. The FDA usually conducts a preliminary evaluation to determine if an application is complete and meets requirements for its full review. An “acceptance for filing” notification is usually made within 60 days of the submission, with the FDA’s statutory date for completing the review under the Prescription Drug User Fee Act (known as the PDUFA.

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Noble Capital Markets Research Report Wednesday, October 16, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – Expanding on HPC Through Enovum
V2X (VVX)/OUTPERFORM – Raising Price Target

Bit Digital (BTBT/$3.56 | Price Target: $5.5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Expanding on HPC Through Enovum
Rating: OUTPERFORM

New Service. Bit Digital’s acquisition of Enovum provides a new vertical within the HPC business in AI/HPC colocation services. As noted in our previous report, the new business will vertically integrate Bit Digital’s HPC business and complement the current GPU Cloud service segment.

Colocation Expansion and Synergies. The new service offers longer contract terms (4-12 years versus 2-5) and higher gross margin (70-80% versus 65-75%) than the current GPU Cloud service. With a potential 8MW expansion, annualized EBITDA can climb to $13 million, and the additional 20MW expansion can further climb it to $45 million. The data centers also can be extended to its GPU Cloud service through storing procured GPUs, offering capacity to customers on a just-in-time basis, or to boost margins instead of hosting third party GPUs. We believe the scalability and potential synergies present an exciting vertical now and in the future.

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V2X (VVX/$62.95 | Price Target: $72)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Raising Price Target
Rating: OUTPERFORM

Raising Price Target. We are maintaining our Outperform rating on VVX shares but raising our price target to $72 from a prior $62. We believe V2X is well positioned for continued operating success. Recent results and contract awards highlight the power of V2X, in our view. At our new price target. VVX shares would trade at 0.8x our projected 2024 revenue and 10.6x our projected adjusted EBITDA for the year. These multiples are still below the peer group averages.

Rationale. On Monday, VVX shares closed at $65.14, above our $62 price target. Year-to-date, VVX shares have appreciated 40.3%, compared to a 10.5% rise over the same period for the Russell 2000 index. Given the business momentum exhibited in the first half of 2024 and our projections for the remainder of the year, we believe the momentum will continue for V2X.

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Noble Capital Markets Research Report Tuesday, October 15, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – Vertically Integrating with Acquisition of Enovum
Seanergy Maritime (SHIP)/OUTPERFORM – Outlook for Capesize Vessel Market Remains Favorable, Increasing Our 2024 and 2025 Estimates

Bit Digital (BTBT/$3.29 | Price Target: $5.5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Vertically Integrating with Acquisition of Enovum
Rating: OUTPERFORM

HPC Business Integrated. Bit Digital announced the acquisition of Enovum Data Centers for approximately CAD $62.8 million (USD $46 million), consisting of CAD$56 million in cash and 1.62 million shares being issued to Enovum’s management. The transaction will vertically integrate the Company’s HPC business with a Tier 3 datacenter and a pipeline of expansion site opportunities. In addition to vertically integrating and potential expansion, the acquisition provides Bit Digital with potential synergies for margin expansion and operational flexibility.

Who is Enovum? Enovum is an owner, operator, and developer of HPC datacenters based in Montreal, Canada. The company has a 4MW Tier 3 datacenter in Montreal powered by renewable hydroelectricity, a benefit to Bit Digital’s carbon-free strategy. The site is leased through 2036 with two five-year extension options, and is fully leased to more than a dozen customers with it expected to generate CAD$10 million of revenue in 2025.

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Seanergy Maritime (SHIP/$10.41 | Price Target: $14)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Hans Baldau hbaldau@noblefcm.com |
Outlook for Capesize Vessel Market Remains Favorable, Increasing Our 2024 and 2025 Estimates
Rating: OUTPERFORM

Updating Estimates. We are increasing our 2024 EBITDA and EPS estimates to $102.1 million and $2.56, respectively, from $101.1 million and $2.35. Additionally, we have increased our 2025 EPS estimates to $102.0 million and $2.39 from $101.3 million and $2.00. Our revised estimates reflect greater operating days and modestly higher time charter rates, along with lower interest expense.

Capesize Vessel Market Fundamentals. We think the outlook for the Capesize shipping market will remain favorable through 2025. Many of the same 2024 tailwinds that have benefited the Capesize market are expected to continue, including strong demand growth for dry bulk commodities, continued disruptions in the Red Sea, and a historically low orderbook for Capesize vessels. Additionally, lower interest rates could boost global economic trade and benefit industry participants. 

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Noble Capital Markets Research Report Friday, October 11, 2024

Companies contained in today’s report:

AZZ Inc (AZZ)/OUTPERFORM – Tempering Our Expectations; Rating Remains an Outperform
Steelcase (SCS)/OUTPERFORM – A New 10b5-1 Plan
Tonix Pharmaceuticals (TNXP)/OUTPERFORM – A New Era For Tonix Begins With The Tonmya NDA Filing

AZZ Inc (AZZ/$77.3 | Price Target: $98)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Tempering Our Expectations; Rating Remains an Outperform
Rating: OUTPERFORM

Second quarter financial results. For the fiscal year (FY) 2025, AZZ reported second quarter adjusted net income of $41.3 million or $1.37 per share compared to $37.2 million or $1.27 per share during the prior year period and our estimate of $40.8 million or $1.35 per share. AZZ maintained its FY 2025 sales guidance range of $1.525 billion to $1.625 billion, lifted the lower end of adjusted EBITDA to a range of $320 million (from $310 million) to $360 million, and increased adjusted diluted EPS expectations to a range of $4.70 to $5.10 from $4.50 to $5.00.

Updating estimates. We have lowered our 2025 EBITDA and EPS estimates to $343.0 million and $4.95, respectively, from $350.3 million and $5.00. Our estimates reflect seasonality in the second half of the year. Our 2026 EBITDA and EPS estimates have been reduced to $361.2 million and $5.45, respectively, from $366.8 million and $5.70. Our 2026 estimates reflect a slower ramp in revenue from the new facility under construction in Washington, Missouri.

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Steelcase (SCS/$12.6 | Price Target: $16)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A New 10b5-1 Plan
Rating: OUTPERFORM

A New Plan. Yesterday, after the market closed, Steelcase filed an 8-k with the Securities & Exchange Commission reporting the Company has entered into a stock repurchase agreement with an independent third party broker. The agreement was established in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. We believe share repurchases are a good use of excess cash on the balance sheet at current prices.

Details. The broker is authorized to repurchase up to 1.5 million shares of the Company’s common stock on behalf of the Company during the period from October 11, 2024 through December 20, 2024, subject to certain price, market and volume constraints specified in the agreement. At yesterday’s closing price, acquiring the shares would cost approximately $19 million and the 1.5 million shares represent approximately 1.6% of the outstanding Class A shares. The Company has $79.9 million remaining under its $100 million share repurchase plan authorization.

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Tonix Pharmaceuticals (TNXP/$0.14 | Price Target: $1.5)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
A New Era For Tonix Begins With The Tonmya NDA Filing
Rating: OUTPERFORM

We Expect The NDA Filing For Tonmya Approval To Be Submitted Shortly. We anticipate the NDA submission for Tonmya to be announced around the end of October 2024. This would start the FDA review process, which we expect to lead to marketing approval in mid-2025. In July, Tonmya received Fast Track Review, a designation that gives advantages in the regulatory pathway. With a pending NDA submission for a drug that could be used by millions of patients, we believe the company’s progress has not been reflected in the stock price.

Fast Track Review Is A Significant Distinction. The Fast Track Review designation from the FDA is awarded to drugs that can make significant impact on serious medical conditions. The designation provides important benefits including increased communications with the FDA, as well as eligibility for Accelerated Approval and Priority Review. We expect the application for Accelerated Approval to be filed shortly after the NDA is completed. This could shorten the FDA’s review period by up to 4 months.

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Noble Capital Markets Research Report Thursday, October 10, 2024

Companies contained in today’s report:

AZZ Inc (AZZ)/OUTPERFORM – Second Quarter Financial Results Exceed Expectations
SKYX Platforms (SKYX)/OUTPERFORM – Raises Capital at Favorable Price
Unicycive Therapeutics (UNCY)/OUTPERFORM – Results From Phase 1 Trial Testing UNI-494 In Acute Kidney Injury Announced

AZZ Inc (AZZ/$81.57 | Price Target: $100)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Second Quarter Financial Results Exceed Expectations
Rating: OUTPERFORM

Second quarter financial results. For the fiscal year (FY) 2025, AZZ reported second quarter adjusted net income of $41.3 million or $1.37 per share compared to $37.2 million or $1.27 per share during the prior year period and our estimate of $40.8 million or $1.35 per share. Adjusted EBITDA increased 4.4% to $91.9 million, roughly in line with our estimate, representing 22.5% of sales versus 22.1% of sales during the second quarter of FY 2024. While sales of $409.0 million were modestly below our $410.5 million estimate, AZZ generated a 25.3% gross margin as a percentage of sales compared to 24.4% during the prior year period and our estimate of 24.4%. AZZ maintained its FY 2025 sales guidance range of $1.525 billion to $1.625 billion, lifted the lower end of adjusted EBITDA to a range of $320 million (from $310 million) to $360 million, and increased adjusted diluted EPS expectations to a range of $4.70 to $5.10 from $4.50 to $5.00.

Debt reduction. During the first half of FY25, AZZ generated operating cash flow of $119.4 million and reduced debt by $45 million. Management expects to reduce debt by at least $100 million during the fiscal year compared to prior expectations of $60 million to $90 million. At quarter end, the company’s net leverage was 2.7x trailing twelve months EBITDA and cash and cash equivalents amounted to $2.2 million.

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SKYX Platforms (SKYX/$1.25 | Price Target: $5)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Raises Capital at Favorable Price
Rating: OUTPERFORM

Scores additional funding. This week, the company announced that it secured $11 million in additional funding through the issuance of convertible preferred shares. At $2 per share, the company raised the funds at a premium to the current share price, which has fluctuated around $1 per share in recent months. The shares will pay an 8% annualized dividend (quarterly installments) and are convertible to common shares at $2 per share.   

Strategic relationship. Lance Shaner is the leading investor in the preferred share offering, which includes several other company insiders. Notably, Mr. Shaner, who chairs SKYX’s Hotel Advisory Board, is the CEO of Shaner Hotel Group, a leading developer of Marriot hotels. In our view, the vote of confidence given by Mr. Shaner could signal potential hotel partnerships for the company in the future and serves as continued validation of the company’s technology by industry insiders.

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Unicycive Therapeutics (UNCY/$0.36 | Price Target: $7)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Results From Phase 1 Trial Testing UNI-494 In Acute Kidney Injury Announced
Rating: OUTPERFORM

Phase 1 Trial Tested Safety, Tolerability, and Pharmacokinetics At Multiple Doses. Unicycive announced completion of the Phase 1 trial testing UNI-494, its product in development for protecting against acute kidney injury. The study was designed to determine tolerability, safety, and pharmacokinetic data for the design of Phase 2. Unicycive plans to present the study at an upcoming scientific meeting.

UNI-494 Is In Development For Preventing Acute Kidney Injury. UNI-494 is a proprietary formulation of nicorandil to protect against the mitochondrial dysfunction and prevent pathways that lead to cell death in acute kidney injury. The proprietary formulation increases the half-life and makes it practical for administration, while maintaining its properties as a nicotinamide ester derivative and selective activator of the ATP-sensitive mitochondrial potassium channel.

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Noble Capital Markets Research Report Wednesday, October 9, 2024

Companies contained in today’s report:

Comtech Telecommunications (CMTL)/MARKET PERFORM – Ex CEO Endorses Dissident Slate
Steelcase (SCS)/OUTPERFORM – A Global Leader with Room to Grow
Traws Pharma (TRAW)/OUTPERFORM – Phase 1 Study In Influenza Shows Positive Data With Plans To Move To Phase 2

Comtech Telecommunications (CMTL/$4.46)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Ex CEO Endorses Dissident Slate
Rating: MARKET PERFORM

Peterman Endorsement. Former CEO Ken Peterman, who was terminated for “conduct unrelated to Comtech’s business strategy, financial results or previously filed financial statements” this past March, has publicly declared his personal endorsement for the full slate of director nominees proposed by Michael Porcelain for the Company’s upcoming 2024 Annual Meeting of Stockholders, adding another layer of intrigue to the dissident efforts.

Reasons. Mr. Peterman notes serious concerns about many decisions made by the current Board, including the June 2024 refinancing, and what he terms the Board’s lack of critical domain expertise in Comtech’s core satellite and NG 911 markets.

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Steelcase (SCS/$12.78 | Price Target: $16)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A Global Leader with Room to Grow
Rating: OUTPERFORM

Initiating Research Coverage. We are initiating research coverage of Steelcase Inc. with an Outperform rating and a $16 price target. Already the global leader in the office furniture marketplace, we believe there is a substantial opportunity to capture additional wallet share. The Company’s research driven approach is a competitive differentiator, in our view.

Largest, But Room to Grow. Despite being the market leader, we believe Steelcase can benefit from a rising market share in a growing market. Steelcase’s overall market share is relatively modest, providing opportunity for Steelcase to capture additional market share, while secular trends are driving overall growth in the market, with the worldwide Office Furniture space projected to grow at a 7.1% CAGR through 2032.

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Traws Pharma (TRAW/$4.8 | Price Target: $7)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Phase 1 Study In Influenza Shows Positive Data With Plans To Move To Phase 2
Rating: OUTPERFORM

Positive Results Announced From Tivoxavir Marboxil Study. Positive data was announced from the Phase 1 clinical trial testing safety and pharmacokinetics of Tivoxavir Marboxil, Traw’s drug in development for seasonal and pandemic influenza. The study showed tolerability and bloodstream levels within the expected range, supporting use as a one-time treatment for flu. The dose for Phase 2 has been selected with the trial planned to begin in 1H2025.

Tivoxavir Inhibitor A Protease Needed For Viral Replication. Tivoxavir acts through inhibition of CAP-dependent endonucleases (CEN), a highly conserved influenza protein needed for the synthesis of its viral mRNA. Tivoxavir was designed for use across a broad range of flu viruses including the H5N1 bird flu virus. Preclinical studies have shown potent inhibition of drug-resistant influenza viruses.

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Noble Capital Markets Research Report Tuesday, October 8, 2024

Companies contained in today’s report:

Comstock Inc. (LODE)/OUTPERFORM – GenMat Acquisition Positions Comstock to Leverage the Power of AI
Euroseas (ESEA)/OUTPERFORM – Updating Estimates Due to New Time Charter Contract for the M/V Jonathan P
Townsquare Media (TSQ)/OUTPERFORM – Ignite’s Its Growth

Comstock Inc. (LODE/$0.51 | Price Target: $2.6)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
GenMat Acquisition Positions Comstock to Leverage the Power of AI
Rating: OUTPERFORM

Acquisition of Quantum Generative Materials (GenMat). Comstock executed an agreement to acquire Quantum Generative Materials, including GenMat’s artificial intelligence materials discovery platform, along with retaining most of the associated technical team. A holding company controlled by Mr. Deep Prasad, GenMat’s founder, will assume control of GenMat’s space-oriented business. GenMat will become a 100%-owned subsidiary of Comstock Inc. and will continue development and commercialization of its physics-based artificial intelligence products and services.

Transaction terms. GenMat will pay $1 million to Mr. Prasad in exchange for the assignment of the rights and related intellectual property. Comstock will make the following payments: 1) $250,000 on the closing date, 2) $250,000 on November 15, 2024, and 3) $500,000 on March 31, 2025. Under terms of the agreement, Mr. Prasad is entitled to a contingent earn-out payment equal to 3% of either the consideration paid in connection with a liquidation of GenMat in excess of $100 million or funds raised by GenMat upon completion of an initial public offering valuing GenMat in excess of $100 million.

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Euroseas (ESEA/$44.25 | Price Target: $64)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Hans Baldau hbaldau@noblefcm.com |
Updating Estimates Due to New Time Charter Contract for the M/V Jonathan P
Rating: OUTPERFORM

New Time Charter Contract: Euroseas Ltd. executed a time charter contract for M/V Jonathan P at a gross daily rate of $20,000 for a minimum period of 11 to a maximum period of 13 months at the option of the charterer. The M/V Jonathan is a 1,740 TEU feeder container ship. Recall that TEU is a unit of cargo capacity that is based on the volume of a 20-foot-long intermodal container that can be transferred between different carriers. The new charter is expected to commence in mid-to-late October 2024.

Profitable Rate and Improved Charter Coverage: The new time charter is expected to contribute EBITDA of ~$4.0 million during the minimum contracted period and improves 2024 and 2025 charter coverage to 96% and 52%, respectively. While the rate is lower than the previous time charter, it is above our prior 2025 rate estimate of $15,000 per day. Moreover, the contract enhances revenue visibility by locking in a profitable rate through 2025.

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Townsquare Media (TSQ/$10.44 | Price Target: $21)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Ignite’s Its Growth
Rating: OUTPERFORM

Forms a strategic partnership. The company announced that it formed a strategic partnership with SummitMedia to offer Townsquare Ignite’s digital advertising solutions to nine of its radio markets that do not overlap with Townsquare’s. We believe that the agreement highlights Townsquare’s preeminence in the digital media space. The agreement will largely kick off in first quarter 2025.

Utilizes SummitMedia’s sales force. Townsquare plans to train SummitMedia’s staff on digital sales practices, at SummitMedia’s expense. Townsquare will add relationship managers to service SummitMedia, execute campaigns, (including creative), and to provide back office support. 

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Noble Capital Markets Research Report Monday, October 7, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – September Production In-line with Last Month
InPlay Oil (IPOOF)/OUTPERFORM – Tempering 2024 and 2025 Expectations; Rating Remains an Outperform
PDS Biotechnology (PDSB)/OUTPERFORM – Clinical Trial in Cervical Cancer Shows Improved Survival and Supports Use In Other Tumors

Bit Digital (BTBT/$3.37 | Price Target: $5.5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
September Production In-line with Last Month
Rating: OUTPERFORM

AI Services. Bit Digital had 256 servers actively generating revenue from its initial Bit Digital AI contract, as of September 30, 2024, and earned approximately $4.2 million of unaudited revenue from this contract during the month.

Mining Side. The Company produced 51.5 BTC in September, a 3.6% decrease from last month’s 53.4 BTC. The active hash rate was 2.43 EH/s, flat with the previous month. Management will continue to be opportunistic with miner purchases dependent upon the returns, in our view.

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InPlay Oil (IPOOF/$1.55 | Price Target: $5.5)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Tempering 2024 and 2025 Expectations; Rating Remains an Outperform
Rating: OUTPERFORM

Lower third quarter commodity prices. During the third quarter, West Texas Intermediate (WTI) crude oil prices declined 18.2% to $68.17 per barrel and averaged $75.35 per barrel. InPlay sells oil at monthly average Edmonton Par prices which are based on the price of WTI crude oil minus quality differentials, transportation, and marketing fees. Crude oil prices have risen since the end of the quarter due to heightened geopolitical risk with WTI crude oil priced at $74.45 per barrel on October 4. WTI and Henry Hub futures prices average $71.16 per barrel and $3.40 per mcf in 2025. We note that natural gas prices in Canada were weak relative to Henry Hub prices during the third quarter.

Outlook for 2025. For 2024, the company forecast average production of 8,700 to 9,000 barrels of oil equivalent per day (boe/d). We are forecasting 2024 production of 8,682 barrels of oil equivalents per day compared to our previous estimate of 8,952 boe/d due to lower third and fourth quarter expectations. We think the company may start off with a conservative 2025 plan that targets production at the upper end of 2024 guidance and have lowered our production expectations to 8,971 from 9,638 barrels of oil equivalents per day.

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PDS Biotechnology (PDSB/$3.71 | Price Target: $17)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Clinical Trial in Cervical Cancer Shows Improved Survival and Supports Use In Other Tumors
Rating: OUTPERFORM

Interim Data From Phase 2 Cervical Cancer Trial Presented. An interim analysis from the Phase 2 ImmunoCerv Trial in locally advanced cervical cancer was presented at the American Society For Radiation Oncology (ASTRO) annual meeting on October 1, 2024. Overall survival (OS) and progression free survival (PFS) showed clinically meaningful improvements over published studies. We believe this supports the efficacy of Versamune HPV in cervical cancer as well as other HPV16+ tumors in other tissues.

Study Design. The ImmunoCerv study was an investigator-initiated trial (ITT) conducted at MD Anderson Cancer Center in Houston, Texas. The study enrolled 17 patients with newly diagnosed high-risk HPV-related cervical tumors at least 5 cm in size. Patients received up to 5 doses of Versamune HPV along with standard of care chemotherapy and radiation.

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Noble Capital Markets Research Report Friday, October 4, 2024

Companies contained in today’s report:

Aurania Resources (AUIAF)/OUTPERFORM – Memoranda of Understanding Executed to Advance Nickel-Rich Placer Project in France
Information Services Group (III)/OUTPERFORM – Sharper Focus with Automation Sale

Aurania Resources (AUIAF/$0.463 | Price Target: $0.6)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Memoranda of Understanding Executed to Advance Nickel-Rich Placer Project in France
Rating: OUTPERFORM

Memoranda of Understanding. Through a wholly owned subsidiary, Aurania entered into a non-binding Memoranda of Understanding (MOU) with the Communes of Ogliastro and Nonza in Cap Corse, Northern Corsica, France for the exploitation of heavy mineral beach placers that are enriched with nickel and other metals. An accumulation of black sand comprised of awaruite and magnetite on the beaches of Albo and Nonza originated from asbestos mine waste that had previously been dumped in the Mediterranean Sea. The waste traveled up along the coast and accumulated silt at the historic ports of Albo and Nonza. Awaruite is a natural nickel-iron mineral alloy.

Placers are rich in nickel. While no resource or reserve has been established, Activation Laboratories Ltd. conducted an analysis of a heavy mineral concentrate produced by simple panning of the beach sand by hand which yielded an assay of 50.4% nickel, 0.701% cobalt, and 0.476% copper. Moreover, a Mozley gravity table concentrate of magnetic beach sand performed by SGS Laboratories yielded 40.1% nickel. At some point, we think Aurania will likely take a bulk sample for analysis.

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Information Services Group (III/$3.24 | Price Target: $5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Sharper Focus with Automation Sale
Rating: OUTPERFORM

Sale of a Unit. Wednesday, ISG announced the sale of its non-core automation unit to UST, a digital transformation solutions company, for $27 million. At closing, ISG received $20 million in cash with $4 million to be released over the next 90 days and $3 million to be released at the end of 1Q25. Proceeds will be used for reducing debt, re-investing in the business, and returning capital to shareholders. Automation contributed roughly $30 million of annual revenue, including $18 million of recurring revenue.

AI Business. With large enterprises’ increasing focus on AI, ISG is placing more emphasis in this area and we believe is poised to capitalize on future spending through its AI Advisory and Research segments. Early indications of growing demand are showing with ISG Tango’s total contract value rising at the end of the second quarter.

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Noble Capital Markets Research Report Thursday, October 3, 2024

Companies contained in today’s report:

Comstock Inc. (LODE)/OUTPERFORM – Collaborative Agreements with the Department of Energy’s National Renewable Energy Laboratory
GoHealth, Inc. (GOCO)/OUTPERFORM – Closes Acquisition After Busy September
Resources Connection (RGP)/OUTPERFORM – Post Call Commentary and Updated Model

Comstock Inc. (LODE/$0.43 | Price Target: $2.6)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Collaborative Agreements with the Department of Energy’s National Renewable Energy Laboratory
Rating: OUTPERFORM

Laying the groundwork for a successful moonshot. Comstock IP Holdings, a wholly owned subsidiary, executed an Exclusive License Agreement (ELA) and Cooperative Research and Development Agreement (CRADA) with the Alliance for Sustainable Energy, the managing and operating contractor of the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL). The agreements provide access to technologies developed by NREL and the Massachusetts Institute of Technology (MIT) to convert lignocellulosic biomass into aromatic sustainable aviation fuel (SAF). The goal is to produce the world’s first 100% renewable SAF at costs approaching parity with fossil fuels by integrating Comstock and NREL technologies.

Cooperative Research and Development Agreement. Terms include a three-year scope of work to jointly develop an integrated process based on Comstock and NREL processes and technologies to refine woody biomass into aromatic SAF and other renewable fuels. Comstock will fund the research and contribute staff, equipment, and use of its pilot facility in Wisconsin. The CRADA is expected to result in the construction of a pre-commercial pilot system to affirm requirements needed to scale-up and incorporate the resulting process into Comstock’s planned 50,000 metric ton per year commercial demonstration facility.

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GoHealth, Inc. (GOCO/$8.98 | Price Target: $22)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Closes Acquisition After Busy September
Rating: OUTPERFORM

Acquired e-TeleQuote. On October 1, GoHealth announced that it closed on its acquisition of e-TeleQuote, one of its peers in the Medicare insurance marketplace landscape. The deal was originally announced in early September. In our view, the terms of the transaction were highly favorable to the company as the deal appears to be immediately accretive to the company’s balance sheet.

Favorable Terms. The company acquired e-TeleQuote through a creative agreement, in which it invested $5 million for a roughly 19% stake in the business through newly issued shares. At that time, the previous owner relinquished its 81% stake, leaving GoHealth as the sole shareholder.  This left the company with all the assets on the e-TeleQuote balance sheet, with over $18 million in cash (including the $5 million paid by GoHealth) and over $100 million in contract assets. The company also gains almost 400 experienced agents.  

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Resources Connection (RGP/$8.35 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Post Call Commentary and Updated Model
Rating: OUTPERFORM

New Model. We believe it is informative to take a deeper dive into the operational changes being made by RGP over the past quarter. The Company has taken the challenging operating environment to create a strong platform, broaden its addressable market, deepen client relationships, and improve efficiency, all of which position the Company to capitalize on the environment once it improves, in our view.

Impact. The On Demand Talent segment is increasingly relevant in the professional staffing space. The new Consulting segment positions RGP higher up the professional services value chain, enabling RGP to play a key role in transformation strategy and execution initiatives. And the Outsourced Services segment is expanding its client base, especially among venture-backed AI startups, while also exploring cross-selling opportunities within the existing client base.

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Noble Capital Markets Research Report Wednesday, October 2, 2024

Companies contained in today’s report:

Resources Connection (RGP)/OUTPERFORM – First Look 1Q25 – Environment Remains Challenging but Green Shoots Evident

Resources Connection (RGP/$9.47 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
First Look 1Q25 – Environment Remains Challenging but Green Shoots Evident
Rating: OUTPERFORM

Overview. While the operating environment remained challenged in 1Q25 as clients continued to delay projects, RGP made strides in evolving its business model and rebuilding its brand architecture and positioning. A full recovery should follow improving client sentiment about the economy, but the Company is seeing pockets of improvement.

1Q25 Results. Revenue came in at $136.9 million, a decline of 19.5% y-o-y, but in-line with guidance. Gross margin was 36.5%, down from 39.4% a year ago and below management’s 37.5%-38.5% guide due to lower consultant utilization and unfavorable leverage on indirect costs. RGP recorded a $3.4 million gain on a sale as well as a $3.9 million impairment charge. Net loss for the quarter was $5.7 million, or a loss of $0.17/sh, compared to net income of $3.1 million, or EPS of $0.09/sh last year. Adjusted EPS was breakeven versus EPS of $0.20/sh in 1Q24.

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Noble Capital Markets Research Report Tuesday, October 1, 2024

Companies contained in today’s report:

Aurania Resources (AUIAF)/OUTPERFORM – What to Expect for the Remainder of 2024
Traws Pharma (TRAW)/OUTPERFORM – Phase 1 Ratutrelvir Results Announced With Plans To Move To Phase 2a

Aurania Resources (AUIAF/$0.38 | Price Target: $0.6)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
What to Expect for the Remainder of 2024
Rating: OUTPERFORM

Exploration at Kuri-Yawi. Aurania is preparing for an induced polarization (IP) geophysical survey of the Kuri-Yawi gold target in Ecuador. The vendor has been selected and the survey is expected to begin in the second half of October. The survey is expected to take approximately one month to complete after which management will review the data to identify targets for a drilling program that we think could commence in the first quarter of 2025. We also believe fieldwork has continued at Crunchy Hill during the quarter.

Anaconda mapping program. Anaconda mapping of the southern and northern parts of Aurania’s Awacha porphyry copper target in Ecuador has been completed. Aurania’s team of geologists is now interpreting the data to define targets for future drilling programs. During the field program, new intrusive outcrops with typical porphyry alteration were discovered.

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Traws Pharma (TRAW/$5.88 | Price Target: $7)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Phase 1 Ratutrelvir Results Announced With Plans To Move To Phase 2a
Rating: OUTPERFORM

Phase 1 Topline Data Shows Safety and Tolerability. Traws Pharma announced results from its Phase 1 trial testing ratutrelvir, its oral protease inhibitor for COVID-19. The trial was designed to determine pharmacokinetics and safety, with results showing consistent plasma levels within the expected range with no adverse events. A Phase 2a trial is being planned to begin in 1H2025.

Ratutrelvir Could Become A Category-Leading Drug. Ratutrelvir is an inhibitor of the SARS-CoV-2 Main protease (Mpro or 3CL protease). It has demonstrated in vitro activity against the original viral strain and numerous variants, including delta and omicron. Ratutrelvir does not require co-administration of ritonavir as a metabolic inhibitor and avoids the drug-drug interactions and potential side effects. In comparison, Pfizer’s Paxlovid is a combination of its Mpro inhibitor, nirmatrelvir, with ritonavir as a metabolic (cytochrome P450) inhibitor.

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Noble Capital Markets Research Report Monday, September 30, 2024

Companies contained in today’s report:

Eledon Pharmaceuticals (ELDN)/OUTPERFORM – Virtual Roadshow Discussions Focus On Kidney Transplantation

Eledon Pharmaceuticals (ELDN/$2.49 | Price Target: $10)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Virtual Roadshow Discussions Focus On Kidney Transplantation
Rating: OUTPERFORM

Client Meetings Answered Questions About Tegoprubart. We held a Virtual Non-Deal Road Show with Eledon’s CEO, Dr. DA Gros. The discussions with clients covered tegoprubart history of development, mechanism of action, clinical trials, and its upcoming milestones. Some of the points raised and common questions are highlighted below.

The Phase 2 BESTOW Trial Completed Enrollment In August. Eledon announced the completion of enrollment for its Phase 2 BESTOW trial that tests tegoprubart against tacrolimus for prevention of kidney transplant rejection. The enrollment was  completed ahead of the expected YE2024 timeframe due to higher than expected interest from the transplant surgeons.

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Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Second Quarter Financial Results Exceed Expectations; Increasing Estimates
Rating: OUTPERFORM

CoreCivic, Inc. (CXW/$12.26)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A Peek into the Second Quarter
Rating: MARKET PERFORM

Second Quarter Results. Total revenue was at $490.1 million, above our forecast of $482 million and above last year’s $463.7 million. Occupancy rates helped the increase in revenue, as occupancy increased to 74.3% from 70.3% in the prior year. Management’s cost initiatives are also taking root, as net income was $19.0 million, or $0.17 per diluted share, compared to $14.8 million or $0.13 last year. We estimated net income of $14.4 million or $0.13 per diluted share.

New Contract. CoreCivic was awarded a new management contract in July from the state of Montana to house additional residents at the Company’s facilities. The Company expects that 120 additional residents will be housed in the Saguaro Correctional Facility in Eloy, Arizona. We believe the new contract with the state shows the Company’s flexibility to accommodate additional residents and demand for CoreCivic’s services.

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Euroseas (ESEA/$40.15 | Price Target: $60)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Strong Second Quarter Financial Results; Increasing Estimates
Rating: OUTPERFORM

Second quarter financial results. Euroseas Ltd. generated second quarter adjusted net income of $34.3 million or $4.92 per share compared to $29.0 million or $4.17 per share during the prior year period. Net revenues increased 23.1% to $58.7 million, while adjusted EBITDA increased 38.1% to $42.3 million. During the second quarter, the company owned and operated an average of 21.26 vessels earning an average time charter equivalent rate of $31,639 per day compared to 18 vessels earning an average time charter equivalent rate of $30,151 per day during the prior year period.

Updating estimates. We have increased our 2024 EBITDA and EPS estimates to $13.24 and $132.0 million, respectively, from $100.0 million and $9.70. We raised our 2025 EBITDA and EPS estimates to $99.4 million and $7.80, respectively, from $90.4 million and $6.80. Our revisions are based on the company’s strong second quarter financial results and higher average time charter equivalent rates in 2024 and 2025.

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Graham Corp (GHM/$27.84 | Price Target: $35)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
First Look at the First Quarter
Rating: OUTPERFORM

Strong Results. Net sales for the quarter were $50.0 million, above the prior year’s $47.6 million and in-line with our estimate of $50.0 million. Higher margin defense sales helped increase revenue as well as gross margin, as gross margin increased to 24.8% from 23.1% last year and above our forecast of 22.0%. Net income totaled $3.0 million, or $0.27/sh, compared to $2.6 million or $0.25/sh last year. We estimated net income of $1.6 million or $0.15/sh.

New Facility. In an effort to support the U.S. Navy’s shipbuilding schedule, the Company received a $13.5 million investment during fiscal 2024 to expand its Batavia, N.Y. production capabilities. The Company is expecting to break ground on the facility in August 2024. We believe the expansion of the facility can facilitate the needs of the U.S. Navy and also potential non-U.S. Navy customers, should the Company have excess capacity.

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Great Lakes Dredge & Dock (GLDD/$8.58 | Price Target: $11)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Solid 2Q24 Sets Up Rest of the Year
Rating: OUTPERFORM

2Q24. Revenue totaled $170.1 million, up from $132.7 million a year ago. We had forecast $166 million. Higher capital and coastal protection project revenues drove the increase. Gross margin improved to 17.5% from 13.5%. Adjusted EBITDA for the quarter increased $9.2 million to $25.8 million. Great Lakes recorded net income of $7.67 million, or EPS of $0.11, compared to $1.73 million, or $0.03/sh in 2Q23.

Backlog. Quarter-end dredging backlog totaled $807.9 million, with an additional $273.1 million in low bids and options pending award and another $44.6 million of offshore wind backlog. Post quarter-end, Great Lakes was the low bidder on approximately $181.6 million of additional work.

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Kratos Defense & Security (KTOS/$20.07 | Price Target: $22)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A Look at the Second Quarter
Rating: OUTPERFORM

Continued Strong Results. Revenue was reported at $300.1 million, beating out our estimate of $270 million by a wide margin and last year’s revenue of $256.9 million. Organic growth was 16.7%. Net income totaled $7.9 million from a prior net loss of $2.7 million last year. We estimated net income of $0.4 million. Adjusted EBITDA was $29.9 million.

KUS. For the quarter, Unmanned Systems was the star performer, generating revenues of $85.8 million, as compared to $52.1 million in the second quarter of 2023, with organic revenue growth of 61.8% driven primarily by increased domestic target drone production and a certain international target drone delivery which contributed $17.4 million.

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Seanergy Maritime (SHIP/$9.95 | Price Target: $13)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Second Quarter Earnings Exceed Expectations
Rating: OUTPERFORM

Second quarter financial results. Seanergy reported second-quarter adjusted net income of $15.3 million or $0.77 per share compared to $3.3 million or $0.18 per share during the prior year period. Unadjusted for stock compensation and loss on extinguishment of debt, EPS amounted to $0.68. We had forecast net income of $12.5 million or $0.61 per share. The variance to our estimate was largely revenue driven with greater fleet utilization of 99.7% versus our 99.4% assumption and a modestly higher average time charter equivalent rate (TCE). Expenses were also below our estimates in several categories, including voyage expenses.

Updating estimates. Despite strong second quarter results, we lowered our 2024 EBITDA and EPS estimates to $101.1 million and $2.35, respectively, from $108.7 million and $2.77. Our revised estimates reflect a reduction in operating days in the second half due to drydocking and lower average time charter equivalent rates. While the overall supply/demand outlook remains strong, some uncertainty exists beyond 2024, particularly with respect to demand in China. 

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The GEO Group (GEO/$12.12 | Price Target: $17)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
2Q24 – Delivering Steady Operational and Financial Performance
Rating: OUTPERFORM

2Q24 Results. Revenue of $607.2 million compared to $593.9 million last year, with all business segments except BI showing y-o-y growth. Adjusted EBITDA came in at $124.1 million versus $119.3 million. Reported net loss was $0.25/sh, versus EPS of $0.20/sh las year. Excluding one-time refi costs, adjusted EPS of $0.23 versus $0.24 last year. We were at a loss of $0.22 and EPS of $0.26, respectively.

Stable, At Higher Levels. GEO ICE populations were stable at approximately 13,000 in the quarter, but up 30% from the year ago. U.S. Marshals populations remained in the 9,000 neighborhood, up some 8% over last year. With current ICE bed utilization some 4,500 beds below the 41,500 authorized level, there is room for additional growth if funding materializes.

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The ODP Corporation (ODP/$24.56 | Price Target: $35)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Jacob Mutchler jmutchler@noblefcm.com |
An Overreaction To A Difficult Quarter
Rating: OUTPERFORM

2Q24 Results. The Company reported lackluster operating results that were largely driven by a challenging macroeconomic environment. Revenue of $1.72 billion, adj. EBITDA of $57 million, and net income of negative $4 million, or negative $0.12 per share, all experienced y-o-y decreases. Notably, ODP shares were down roughly 35% at market close, which, in our opinion was an overreaction, spurred on by recessionary concerns.

Veyer gains traction. During the earnings call management highlighted that Veyer received a verbal agreement from a large e-commerce company that has the potential to nearly double the segment’s top line. Notably, the agreement pertains to warehousing and the company’s well established supply chain. Importantly, we view the contract as a significant development that has the ability to favorably alter the Company’s trajectory.

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Townsquare Media (TSQ/$11.09 | Price Target: $21)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Digital On A Favorable Revenue Trajectory
Rating: OUTPERFORM

In line quarter. The company delivered on expectations for its second quarter. Total company revenues of $118.2 million, down a modest 2.5% from the year earlier quarter, was in line with our $117.7 million estimate. Adj. EBITDA in the quarter was $26.2 million, in line with our $26.8 million estimate and within the company’s guidance range of $26.0 million to $27.0 million. 

Digital on a recovery trajectory. Its Interactive business is sequentially gaining subscribers and its programmatic business, Ignite, had solid 9% revenue growth in Q2. With easier National Digital comps and with improving revenue trends in its Interactive business, we expect its Digital segment to return toward revenue growth in the second half.

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Noble Capital Markets Research Report Wednesday, August 7, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – July Production Released
Century Lithium Corp. (CYDVF)/OUTPERFORM – Bringing the Final Step In-House
Commercial Vehicle Group (CVGI)/OUTPERFORM – Q2 Results: A Closer Look
GeoVax Labs (GOVX)/OUTPERFORM – GeoVax Highlights Trial Progress In 2Q24 Report
Information Services Group (III)/OUTPERFORM – In a More Stable Environment
V2X (VVX)/OUTPERFORM – Set Up For 2H24 Growth

Bit Digital (BTBT/$2.91 | Price Target: $5.5)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
July Production Released
Rating: OUTPERFORM

AI and Staking. Bit Digital had 256 servers generating revenue during the quarter and earned an estimated $4.3 million of revenue during the month. The staking side had approximately 17,184 ETH actively staked, flat with last month, and earned a blended APY of approximately 3.3% on its staked ETH in the month of July, slightly down from last month’s 3.5%.

Mining Side. The Company produced 60.5 BTC in the month, a slight 1.9% decrease from the previous month. The active hash rate was roughly 2.46 EH/s, a decline from 2.57 EH/s in June. With the active goal of 6.0 EH/s at the end of 2024, we anticipate a ramp up in the hash rate during the last few months of the year.

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Century Lithium Corp. (CYDVF/$0.1847 | Price Target: $2.35)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Bringing the Final Step In-House
Rating: OUTPERFORM

Lithium carbonate production at the pilot plant. Century Lithium successfully added a lithium carbonate stage at the company’s lithium extraction facility which is part of the company’s Angel Island Mine project. Recall that Century recently changed the name of its Clayton Valley Lithium project to Angel Island Mine to distinguish it from other projects. Previously, concentrated lithium solutions from the pilot plant were treated by Saltworks Inc. at their facility in Richmond, British Columbia to produce samples of battery grade lithium carbonate.

Following through on the feasibility study. Adding the lithium carbonate stage at the pilot plant satisfies one of the recommendations contained in the recently published feasibility study. Being able to produce battery grade lithium on site further demonstrates the commercial viability of the project and will also help the company to better optimize the process from the direct lithium extraction (DLE) phase through to production of the final product. Century successfully treated 200 liters of concentrated lithium solution and produced 20 kilograms of high-grade lithium carbonate on site.

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Commercial Vehicle Group (CVGI/$3.98 | Price Target: $8)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Jacob Mutchler jmutchler@noblefcm.com |
Q2 Results: A Closer Look
Rating: OUTPERFORM

Electrical Systems. To our surprise, the segment had a difficult quarter, revenue decreased $13.5 million, or 21.2%. The decrease was largely attributed to a slow down in the construction and agriculture industries, and new contract wins taking longer to ramp up and at lower than expected volumes. In our view, the company is well positioned to capitalize on the industry rebound, anticipated to take place in 2025 & 2026.

Vehicle Solutions. The segment experienced a decrease of $11.8 million, or 7.7%, from the prior year period, which was primarily driven by softer demand and reorganization. Notably, the company anticipated a more drastic decline in the business and closed a plant, shifting manufacturing to three other existing facilities, which should improve cost structure over the long-term.

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GeoVax Labs (GOVX/$1.8 | Price Target: $6)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
GeoVax Highlights Trial Progress In 2Q24 Report
Rating: OUTPERFORM

GeoVax Made Significant Advances In 2Q24. GeoVax reported a 2Q24 loss of $5.1 million or $(1.99) per share. The company reviewed the progress made during the quarter, including the DARPA grant for the Phase 2 CM04S1 trial, two CM04S1 trials in immunocompromised cancer patients, and announcement of the Phase 2 Gedeptin trial design.

Financial Results Reflect First Grant Revenues. During 2Q, GeoVax recognized $0.3 million in revenues from work related to the Phase 2 CM04S1 trial. Revenue is recognized as the work is completed on a cost-reimbursement basis, with billings recorded as receivables. The company had $1.6 million in cash on June 30 and plans to raise capital in the near future.

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Information Services Group (III/$3.17 | Price Target: $8)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
In a More Stable Environment
Rating: OUTPERFORM

Improved Metrics. Although performance decreased from the prior year, the Company improved sequentially. Stable revenue and lower costs led to higher a gross margin of 39.5% compared to 36.1% in the first quarter. The increased margin led to profitability in the quarter compared to a net loss last quarter. These improvements show ISG’s efficiency in the continued down environment while the Company prepares for clients to resuming spending, in our view.

Geographies. Although the regions are down from the prior year, most of ISG’s geographies are showing stability. Both the Americas and Europe are experiencing stability in their pipelines even as the uncertain macro environment continues. We would note management believes spending will resume more quickly in the Americas segment, primarily the U.S., with a return to spending as soon as the fourth quarter.

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V2X (VVX/$45.75 | Price Target: $62)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Set Up For 2H24 Growth
Rating: OUTPERFORM

2Q24 Results. Record revenue of $1.07 billion, up 9.7% from $977.9 million in 2Q23. We had estimated $1.02 billion. Adjusted EBITDA totaled $72.3 million, or a 6.7% margin, compared to $77.8 million and 8.0% last year, driven by contract mix. V2X reported a GAAP net loss of $6.5 million, or a loss of $0.21/sh, versus net income of $1.8 million, or $0.06/sh, in 2Q23. Adjusted EPS was $0.83 versus $1.10. We had estimated adjusted EPS at $0.87.

Revenue Drivers. Revenue growth in the quarter was achieved through continued expansion of existing business in the Pacific and Middle East regions, as well as new programs. Revenue growth in both areas grew by 29% year-over-year. Notably, in the quarter V2X had over $500 million of on contract growth.

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Noble Capital Markets Research Report Tuesday, August 6, 2024

Companies contained in today’s report:

Commercial Vehicle Group (CVGI)/OUTPERFORM – First Look at 2Q24
Information Services Group (III)/OUTPERFORM – A Look at the Second Quarter

Commercial Vehicle Group (CVGI/$4.73 | Price Target: $12)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
First Look at 2Q24
Rating: OUTPERFORM

Still Challenging. 2Q24 revenue declined 12.3% y-o-y to $229.9 million due to softening global customer demand. We had projected $237.5 million. Operating income was $0.8 million and adjusted operating income totaled $5.7 million, down 65.9% y-o-y. CVGI reported a net loss of $1.6 million, or $0.05/sh, and adjusted net income of $2.1 million, or EPS of $0.06. We had forecast adjusted EPS of $0.21. Adjusted EBITDA of $10 million was down 51.9% y-o-y and short of our $16 million estimate.

Drivers. Second quarter results were challenged due to multiple factors. In particular, continued softening in the construction and agricultural end markets and reduced volumes in new business win launches, impacting the key growth segment in Electrical Systems. CVG also experienced operational inefficiencies in the Vehicle Solutions segment resulting from a new product launch with a major customer across multiple sites, as well as activities to prepare the Cab Structures business for sale.

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Information Services Group (III/$3.16 | Price Target: $8)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A Look at the Second Quarter
Rating: OUTPERFORM

2Q Results. Reported revenues totaled $64.3 million, slightly below our estimate of $65 million. Clients are continuing to delay projects, as these are being pushed further. Net income was better than expected at $2.0 million, or $0.04 per diluted share, compared to $2.3 million or $0.05 last year. We estimated a net loss of $0.2 million or breakeven EPS.

Silver Lining. The continued headwind of client decision making has offered a light at the end of the tunnel for management. An increase in contract value through ISG Tango, now exceeding $4 billion from $2.6 billion in the previous quarter, offers a sign that clients are allocating more towards projects in our view. The increase in overall contract value showcases management’s belief in increasing business spending as the year progresses.

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Noble Capital Markets Research Report Monday, August 5, 2024

Companies contained in today’s report:

ACCO Brands (ACCO)/OUTPERFORM – 2Q 2024: A Closer Look
Cumulus Media (CMLS)/MARKET PERFORM – Green Shoots Wither Amidst Economic Uncertainty
Haynes International (HAYN)/MARKET PERFORM – Tempering Expectations for the Remainder of FY 2024 and FY 2025

ACCO Brands (ACCO/$4.65 | Price Target: $12)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Jacob Mutchler jmutchler@noblefcm.com |
2Q 2024: A Closer Look
Rating: OUTPERFORM

Segment results. Americas revenue totaled $292.3 million in Q2, a decrease of 13.1% from the prior year period. Comparable sales were down 12.7%. International revenue was $146.0 million in Q2, a decrease of 7.1% from the prior period. Comparable sales decreased 5.1%. While revenue was modestly below our estimates, largely due to soft demand for business and consumer office products and a shift from lower margin products, we believe the Company’s outlook is favorable.

Cost reduction efforts. The company made significant progress towards its cost reduction target of $60 million in annualized savings, with $10 million in cost reductions realized so far this year, and $20 million of savings expected for full year 2024. Notably, the Company reduced inventory levels by 17% from the prior year with its technology enabled SKU rationalization

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Cumulus Media (CMLS/$1.62)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Green Shoots Wither Amidst Economic Uncertainty
Rating: MARKET PERFORM

Mixed Q2 results. The company reported revenue of $204.8 million, slightly lighter than our expectations of $206.2M. Due to cost cuts, adj. EBITDA was $25.2 million, finishing ahead of our estimates by $2.1M. Digital revenues advanced 5%, but was slower than the 7% in the first quarter. 

Lackluster pacing outlook. Management indicated that third quarter revenue pacing is disappointingly down low single digits, in spite of the anticipated influx of Political advertising. We believe that spot advertising is down mid single digits, with Network likely to be down double digits, similar to the second quarter. 

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Haynes International (HAYN/$59.6)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Tempering Expectations for the Remainder of FY 2024 and FY 2025
Rating: MARKET PERFORM

Third quarter financial results. Haynes reported third-quarter fiscal 2024 net income of $8.1 million or $0.63 per share compared to $8.8 million or $0.68 per share during the prior year period. Adjusted EBITDA was $17.1 million compared to $18.7 million during the prior year period and declined as a percentage of net revenues. Third-quarter results were negatively impacted by raw material headwinds and lower mill production volumes due to fewer orders and company initiatives to reduce inventory.

Updating estimates. We have lowered our 2024 EBITDA and EPS estimates to $68.5 million and $2.52, respectively, from $77.3 million and $3.00. The revisions reflect third quarter financial results and management expectations that fourth quarter revenue and earnings will be like the third quarter due to the unfavorable impact of lower production volumes. Our 2025 EBITDA and EPS estimates were lowered to $90.5 million and $3.82, respectively, from $99.5 million and $4.15 to reflect lower revenue and margin expectations in 2025, particularly during the first half of the year.

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Noble Capital Markets Research Report Friday, August 2, 2024

Companies contained in today’s report:

ACCO Brands (ACCO)/OUTPERFORM – Reports 2Q24 Results
Commercial Vehicle Group (CVGI)/OUTPERFORM – A Strategic Sale
DLH Holdings (DLHC)/OUTPERFORM – A Transitionary Quarter
FreightCar America (RAIL)/OUTPERFORM – Multi-Year Tank Car Conversion Contract Provides a Solid Path Toward Tank Car Production
Haynes International (HAYN)/MARKET PERFORM – Third Quarter Negatively Impacted by Lower Production and Raw Material Headwinds

ACCO Brands (ACCO/$4.98 | Price Target: $12)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Reports 2Q24 Results
Rating: OUTPERFORM

2Q24 Results. Reported results continue to be impacted by soft demand for ACCO products. In addition, the previously disclosed exit of certain lower margin business, primarily in the back-to-school categories, and a one-time impairment charge related to goodwill and intangible assets negatively impacted reported results.

Details. Revenue of $438.3 million was down 11.2% on a reported basis y-o-y, with comp sales off 10.2%, reflecting softer global business and consumer demand, although computer accessories saw growth. We had projected revenue of $455 million, in-line with consensus. Reported operating loss was $111.2 million reflecting $165.2 million of non-cash impairment charges. Adjusted operating income was $64.6 million, down from $66.2 million in 2Q23. GAAP net loss was $125.2 million, or $1.29/sh, with adjusted net income of $36.6 million, or $0.37/sh. In 2Q23, ACCO reported net income of $26.4 million, or $0.27/sh, and adjusted net income of $36.5 million, or $0.38/sh.

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Commercial Vehicle Group (CVGI/$5.1 | Price Target: $12)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A Strategic Sale
Rating: OUTPERFORM

Cab Structures. Yesterday, after the market close, Commercial Vehicle Group (CVG) announced the sale of its Kings Mountain, NC Cab Structures business. This is another step in the Company’s strategic plan to lessen the impact of the highly cyclical Class 8 truck business.

Details. Net proceeds of the transaction are expected to be $40 million, with closure in the second half of 2024. We expect the majority of the net proceeds to be used for debt paydown and other general corporate purposes. CVG did not release unit financial performance, but we do expect management to update its full-year 2024 outlook to reflect the impact of the business unit divesture during its 2Q24 earnings conference call on August 6th.

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DLH Holdings (DLHC/$10.39 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A Transitionary Quarter
Rating: OUTPERFORM

Environment. The government continues to delay its decision making process on various contract awards, as management notes that although decisions do take time, they have been abnormally long in 2024. Coinciding with this is the VA’s decision on its CMOP locations, which provides a good and bad aspect for DLH. The good is a likely extension of DLH’s ID/IQ contract with the VA, but the bad is that the VA is reducing responsibilities within the awards, not allowing the Company to differentiate from its competitors.

Expanding Markets. As the government delays its decisions, management is focused on its three markets in digital transformation & cyber security, science research & development, and systems & engineering & integration. These markets have had growth to their budget in recent years and we believe they provide DLH with future opportunities to expand its pipeline and add to its total proposals outstanding, a focus of management.

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FreightCar America (RAIL/$3.49 | Price Target: $4.5)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Multi-Year Tank Car Conversion Contract Provides a Solid Path Toward Tank Car Production
Rating: OUTPERFORM

Expansion into tank car conversions. FreightCar America has entered into a multi-year contract to convert over 1,000 existing DOT-111 tank cars to DOT-117R (retrofit) tank cars over a two-year period. In addition to further diversifying its product offerings, the expansion into tank car conversions provides a solid path toward M-1002 tank car facility certification by the Association of American Railroads and the production of DOT-117 tank cars. 

Ensuring the safe transportation of flammable liquids. The completed tank cars will receive new exterior tank jackets, thermal protection, full height head shields, top fittings protection and upgraded bottom outlet valves. As part of a federally mandated program, all tank cars transporting Class 3 flammable liquids, such as refined products, crude oil and ethanol, are required to meet DOT-117 or equivalent specifications by May 1, 2029.

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Haynes International (HAYN/$59.66)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Third Quarter Negatively Impacted by Lower Production and Raw Material Headwinds
Rating: MARKET PERFORM

Third quarter financial results. Haynes reported third-quarter fiscal 2024 net income of $8.1 million or $0.63 per share compared to $8.8 million or $0.68 per share during the prior year period. Adjusted EBITDA was $17.1 million compared to $18.7 million during the prior year period and declined as a percentage of net revenues. Third-quarter results were negatively impacted by raw material headwinds and lower mill production volumes due to fewer orders and company initiatives to reduce inventory. Strong operating cash flow of $52.5 million supported reducing the balance of the company’s credit facility by $24.2 million during the first nine months of fiscal 2024.

Merger Update. With respect to Haynes’ proposed merger with North American Stainless, Inc., a wholly owned subsidiary of Acerinox S.A., required approvals in the United States have been obtained. Following favorable decisions by European countries reviewing the transaction from a foreign direct investment (FDI) perspective, the company expects to obtain remaining required clearances

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Noble Capital Markets Research Report Thursday, August 1, 2024

Companies contained in today’s report:

Codere Online (CDRO)/OUTPERFORM – Casino Games A Key Driver
DLH Holdings (DLHC)/OUTPERFORM – A Look into the Third Quarter
FAT Brands (FAT)/OUTPERFORM – Overview of 2Q24 Operating Results
GeoVax Labs (GOVX)/OUTPERFORM – Gedeptin Phase 2 Head and Neck Trial Design Announced
MustGrow Biologics Corp. (MGROF)/MARKET PERFORM – Tack On Another Approval

Codere Online (CDRO/$8.2 | Price Target: $14)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Casino Games A Key Driver
Rating: OUTPERFORM

Adj. EBITDA positive. Q2 overachieved expectations with revenue growth a strong 39% to €54.4 million (vs our €47.6 million estimate) and with positive adj. EBITDA of €1.3 million (vs. our flat estimate). The results benefited from a favorable sports calendar, as well as strong customer growth for its casino games. Casino revenue accounted for 59% of total company revenue, up from 56% in Q1. 

Spain and Mexico deliver strong revenue performance. The company exhibited favorable operating momentum in its latest Q2 quarter. Net gaming revenue increased a solid 39% to €54.4 million, nicely above our estimate of €47.6 million. The quarterly revenue represented a sequential quarterly revenue improvement from the first quarter at €53.0 million and an acceleration in revenue growth from 34% in Q1. 

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DLH Holdings (DLHC/$11.57 | Price Target: $21)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
A Look into the Third Quarter
Rating: OUTPERFORM

3Q Results. Revenue was reported at $100.7 million, below our estimate of $103 million and down from the prior year of $102.2 million. Net income was $1.1 million, or $0.08 per diluted share, compared to $1.7 million, or $0.12 last year. EBITDA was roughly $10.0 million versus $11.4 million in the prior year, or a margin of 10.0% and 11.1%, respectfully, in range of management’s expectations.

Delays. The GRSi acquisition continues to experience anticipated runoff of DLH’s small business set-aside awards, as these contracts transitioned towards small businesses impacting overall revenue. The government evaluation process also has resulted in delays for new business revenue for the Company in fiscal 2024. However, with the budgets passed earlier in the year for various government departments, including the VA and HHS, we expect DLH to be awarded new contracts sooner rather than later.

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FAT Brands (FAT/$5.25 | Price Target: $25)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Overview of 2Q24 Operating Results
Rating: OUTPERFORM

Note: FAT Brands has entered into an Equity Distribution Agreement with Noble Capital Markets relating to the potential sale of up to $10.335 million of Class A common stock and/or 8.25% Series B Cumulative Preferred stock. As a result, this report will just focus on a review of FAT Brands’ second quarter operating results.

2Q24 Results. FAT’s 2Q24 results were very similar to 1Q24 results. While we had hoped for some sequential improvement, given the overall industry challenges seen so far this reporting season, relatively flat results are not too bad. Revenue totaled $152 million, flat sequentially and up 42.4% y-o-y. Adjusted EBITDA totaled $15.7 million versus $23.1 million last year, with the decline reflecting lower employee retention credits this quarter. FAT reported a net loss of $41.3 million, or $2.43 per share, compared to a loss of $8.7 million, or a loss of $0.53/sh in 2Q23.

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GeoVax Labs (GOVX/$2.08 | Price Target: $6)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Gedeptin Phase 2 Head and Neck Trial Design Announced
Rating: OUTPERFORM

Gedeptin Will Be Tested As A Neoadjuvent. GeoVax announced the design of the Phase 2 trial testing Gedeptin in head and neck cancer. As planned, a Clinical Advisory Panel completed its data review from the clinical trials and made its design recommendation. The trial will test Gedeptin in combination with an immune checkpoint inhibitor (ICI) before surgery in head and neck squamous cell carcinoma (HNSCC) patients after first recurrence. The trial is expected to start in 1H25.

Trial Will Use A Single Cycle Of Gedeptin Before Surgery. The trial will enroll patients with HNSCC after first relapse. Patients will be treated with a single cycle of Gedeptin/fludarabine and a checkpoint inhibitor, followed by surgery. This adds Gedeptin’s intracellular activation of a chemotherapy agent to kill cancer cells with the immune response of the checkpoint inhibitor. The planned enrollment is 36 patients with a primary endpoint of pathological response rate.

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MustGrow Biologics Corp. (MGROF/$0.54)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Tack On Another Approval
Rating: MARKET PERFORM

Another State. MustGrow announced the Company has received the Idaho State Department of Agriculture approval for TerraSante, allowing the product to commence sales in the state. The state follows the existing Organic OMRI Listed certifications in Oregon and Washington. Idaho now joins the list of states to authorize product sales, including the aforementioned Oregon and Washington and California.

Market Size. Idaho provided approximately $1.3 billion in crop production from potatoes in 2023, an increase from $1.2 billion in 2022, as potatoes are the state’s top crop. Other commodities the state provides includes barley, alfalfa hay, peppermint oil, and food trout. Overall, the state’s crop production was $3.3 billion in 2021.

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