Industrials Archives - Page 43 of 65

Timken Strengthens Industrial Motion Portfolio Through Des-Case Acquisition

Posted on September 5, 2023September 5, 2023 by slightbourne@noblecapitalmarkets.com

The Timken Company (NYSE: TKR), a global leader in engineered bearings and industrial motion products, has announced its acquisition of Des-Case Corp., a Nashville-based manufacturer specializing in filtration products for industrial lubricants. Founded in 1983, Des-Case serves various industrial sectors, and it is expected to generate approximately $40 million in revenue in 2023.

Des-Case is recognized for its innovative filtration solutions that complement Timken’s automatic lubrication systems. This acquisition opens up opportunities for synergy, such as cross-selling and international expansion. Des-Case’s product range includes breathers, filter elements, condition monitoring, lubrication storage, and filter systems, all of which play a crucial role in improving equipment reliability, reducing downtime, and extending the lifespan of customer systems.

Des-Case employs around 120 individuals and operates manufacturing facilities in both Tennessee and the Netherlands. The acquisition was funded through a combination of cash reserves and Timken’s existing revolving credit facility.

Timken, with over a century of experience and innovation, designs and manufactures engineered bearings and industrial motion products. In 2022, the company achieved $4.5 billion in sales and has a global workforce of more than 19,000 employees across 46 countries. Timken has received recognition as one of America’s Most Responsible Companies, World’s Most Ethical Companies, America’s Most Innovative Companies, and America’s Best Large Employers by various prestigious organizations.

Take a look at other companies in the metals space by exploring Mark Reichman’s coverage list.

Great Lakes Dredge & Dock (GLDD) – Another LNG Award

Posted on August 24, 2023August 24, 2023 by cpereira@noblefcm.com

Thursday, August 24, 2023

Great Lakes Dredge & Dock Corporation is the largest provider of dredging services in the United States. In addition, Great Lakes is fully engaged in expanding its core business into the rapidly developing offshore wind energy industry. The Company has a long history of performing significant international projects. The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions. In its over 131-year history, the Company has never failed to complete a marine project. Great Lakes owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of approximately 200 specialized vessels. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free® (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Port Arthur Award. Yesterday, Great Lakes Dredge & Dock announced the award for the Port Arthur LNG Phase 1 project Marine Dredging and Disposal contract. This is the second LNG related award received by the Company this summer, following on the heels of the Next Decade contract. The Port Arthur LNG project is a natural gas liquefaction and export terminal in Southeast Texas with direct access to the Gulf of Mexico.

Work Details. The scope of work on this project is to dredge the Port Arthur LNG Berthing Pocket on the Port Arthur Ship Canal. The berthing pocket and turning basin will connect to the Port Arthur Ship Canal and allow LNG vessels to berth, load and depart safely. A significant portion of the dredged materials will be placed by Great Lakes within designated Beneficial Use of Dredged Material (BUDM) areas to restore and enhance marshlands within a local wildlife refuge. Great Lakes is expected to start this project later this year and finish within two years.

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AZZ Inc. (AZZ) – Initiating Coverage With an Outperform Rating and $60 Price Target

Posted on August 21, 2023August 21, 2023 by cpereira@noblefcm.com

Monday, August 21, 2023

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

AZZ Inc. is North America’s largest independent hot-dip galvanizing and coil coating solution company. AZZ has two operating divisions – Metal Coatings and Precoat Metals. Metal Coatings provides a wide range of high-quality metal finishing and coating services that protect from the destruction of metallic corrosion including galvanizing and other forms of coating and plating. Precoat Metals is engaged in the growing use of coil coated metal, often referred to as prepainted metal because the metal is painted prior to, rather than after, fabrication.

The shares of AZZ trade at a sharp discount to other coating companies. We believe the discount also reflects a more leveraged balance sheet following recent acquisitions. Positive free cash flow will allow the company to pay down debt. As the company deleverages, we believe it will see valuation multiples rise to levels approaching peer companies.

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Great Lakes Dredge & Dock (GLDD) – More Work

Posted on August 15, 2023August 15, 2023 by cpereira@noblefcm.com

Tuesday, August 15, 2023

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

New Awards. Friday and then on Monday, Great Lakes was awarded two new contracts worth a combined $49.2 million, according to the Department of Defense daily contract award notification. Combined with two end of July awards worth $36.7 million, Great Lakes has received some $86 million of new business in the last couple of weeks. We remain optimistic the awards pace will speed up, at least through the Federal government’s fiscal 2023 year-end.

Award 1. Great Lakes was awarded a $22.1 million firm-fixed-price contract for dredging in the Mississippi River. Work will be performed in Plaquemines, Louisiana, with an estimated completion date of December 17, 2023. Fiscal 2023 civil operation and maintenance funds in the amount of $22.1 million were obligated at the time of the award. U.S. Army Corps of Engineers, New Orleans, Louisiana, is the contracting activity.

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Kelly Services (KELYA) – Lower Demand Environment but Still Underway with Transformation

Posted on August 14, 2023August 14, 2023 by cpereira@noblefcm.com

Monday, August 14, 2023

Kelly (Nasdaq: KELYA, KELYB) connects talented people to companies in need of their skills in areas including Science, Engineering, Education, Office, Contact Center, Light Industrial, and more. We’re always thinking about what’s next in the evolving world of work, and we help people ditch the script on old ways of thinking and embrace the value of all workstyles in the workplace. We directly employ nearly 350,000 people around the world and connect thousands more with work through our global network of talent suppliers and partners in our outsourcing and consulting practice. Revenue in 2021 was $4.9 billion. Visit kellyservices.com and let us help with what’s next for you.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2Q Results. Kelly reported revenues of $1.22 billion, a 3.9% decrease, or down 4.5% in constant currency, from the prior year. Organic revenue was down 2.2% in constant currency. We estimated revenue at $1.24 billion. GP rate was down 90 basis points to 19.8% primarily due to lower permanent placements fees. Net income was $7.5 million, or EPS of $0.20, compared to $2.2 million, or EPS of $0.06 last year. Adjusted EPS was $0.36 versus $0.45. We were at $0.44.

Transformation Plan. Kelly is moving quickly, already seeing benefits from its cost optimization and efficiencies programs. Next up will be a focus on growth, both organic, especially capturing a higher wallet share from existing clients, as well as a renewed inorganic focus.

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Euroseas (ESEA) – Favorable charter book protecting company against shipping rate declines

Posted on August 10, 2023August 10, 2023 by cpereira@noblefcm.com

Thursday, August 10, 2023

Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of the Marshall Islands to consolidate the ship owning interests of the Pittas family of Athens, Greece, which has been in the shipping business over the past 140 years. Euroseas trades on the NASDAQ Capital Market under the ticker ESEA. Euroseas operates in the container shipping market. Euroseas’ operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company, which is responsible for the day-to-day commercial and technical management and operations of the vessels. Euroseas employs its vessels on spot and period charters and through pool arrangements.

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Second quarter results were above expectations. Euroseas took possession of a newbuild vessel during the quarter and was able to put it in charter at favorable rates. The vessel addition, combined with the lack of ships in drydock, meant an increase in available operating days. This helped offset a decrease in average TCE rates relative to the same quarter last year and meant that revenues, net were similar to last year.

Operating costs running in line with expectations. Like most shipping companies, operating costs are rising with inflation. The same is true for Euroseas, which reported expenses modestly higher. Issues associated with the housing and transportation of crews following the conflict in Ukraine are now behind the company. Drydocking epenses were down as none of Euroseas’s vessels were drydocked during the quarter.

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The GEO Group (GEO) – Second Quarter Results Released

Posted on August 10, 2023August 10, 2023 by cpereira@noblefcm.com

Thursday, August 10, 2023

The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 103 facilities totaling approximately 83,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2Q23 Results. Revenue for the quarter came in at $593.9 million, up from $588.2 million a year ago. Adjusted EBITDA totaled $129.0 million, EPS was $0.20, and adjusted EPS $0.24. In the year ago period, GEO reported $132.3 million, $0.37, and $0.42, respectively. We had forecast $587 million, $124.1 million, $0.20, and $0.20, respectively.

ISAP? A key factor in 2H23 performance will be the number of participants under the ISAP program. Numbers have fallen for longer than management had originally expected but recent policy initiatives should result in participant stabilization, if not increases in 2H23.

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V2X, Inc. (VVX) – A Solid 2Q23 Beat

Posted on August 9, 2023August 9, 2023 by cpereira@noblefcm.com

Wednesday, August 09, 2023

For more than 70 years, Vectrus has provided critical mission support for our customers’ toughest operational challenges. As a high-performing organization with exceptional talent, deep domain knowledge, a history of long-term customer relationships, and groundbreaking technical expertise, we deliver innovative, mission-matched solutions for our military and government customers worldwide. Whether it’s base operations support, supply chain and logistics, IT mission support, engineering and digital integration, security, or maintenance, repair and overhaul, our customers count on us for on-target solutions that increase efficiency, reduce costs, improve readiness, and strengthen national security. Vectrus is headquartered in Colorado Springs, Colo., and includes about 8,100 employees spanning 205 locations in 28 countries. In 2021, Vectrus generated sales of $1.8 billion. For more information, visit the company’s website at www.vectrus.com or connect with Vectrus on Facebook, Twitter, and LinkedIn.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Another Excellent Quarter. Driven by expansion of existing programs, new awards, and recompete wins, V2X reported excellent results for 2Q23. Revenue of $977.9 million was up 10.2% on a pro forma basis, and well above our $905 million forecast. Adjusted EBITDA came in at $76.4 million, versus our $64.5 million estimate. Adjusted diluted EPS was $1.01 compared to our $0.74 estimate.

Opportunity Remains Robust. V2X was awarded approximately $2.1 billion of awards in the quarter, with a book-to-bill of 2.2x. Backlog grew 10% to $13 billion. The Company has $5 billion of bids awaiting award and we believe V2X is well positioned to win its fair share. The overall market opportunity exceeds $160 billion.

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EuroDry (EDRY) – Shipping rates fall, a vessel is detained, operating costs rise

Posted on August 9, 2023August 9, 2023 by cpereira@noblefcm.com

Wednesday, August 09, 2023

EuroDry Ltd. was formed on January 8, 2018 under the laws of the Republic of the Marshall Islands to consolidate the drybulk fleet of Euroseas Ltd. into a separate listed public company. EuroDry was spun-off from Euroseas Ltd. on May 30, 2018; it trades on the NASDAQ Capital Market under the ticker EDRY. EuroDry operates in the dry cargo, drybulk shipping market. EuroDry’s operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company and Eurobulk (Far East) Ltd. Inc., which are responsible for the day- to-day commercial and technical management and operations of the vessels. EuroDry employs its vessels on spot and period charters and under pool agreements.

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Results continue to slide in response to falling shipping rates and a ship detention. Average TCE rates, which showed signs of improving in April, fell in May and June to an average quarterly rate of $12,179/day versus $23,490/day. Eurodry reported that one of its ships was detained for 35 days (out of service 48 days) due to alleged pollution violations resulting in the cancellation of a high-priced charter.

Operating costs rose. Total operating costs ($12.7m versus $10.2m) rose sharply. Higher voyage expenses are related to the ship detention. Management described the rise in vessel operating expenses relative to last year as due to “inflationary increases” although that explanation does not adequately explain the quarter-over-quarter increase ($12.7m versus $11.8m) in costs.

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CoreCivic, Inc. (CXW) – Post Call Commentary and Updated Models

Posted on August 9, 2023August 9, 2023 by cpereira@noblefcm.com

Wednesday, August 09, 2023

CoreCivic is a diversified, government-solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and believe we are the largest private owner of real estate used by government agencies in the United States. We have been a flexible and dependable partner for government for nearly 40 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. Learn more at www.corecivic.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

More ICE Funding? CoreCivic had a 45% increase in ICE populations from the ending of Title 42 through July 31, 2023. Further increases in populations will partly depend on funding. Already, DHS has reprogrammed existing funds and, reportedly, will seek $2 billion in supplemental funds to address shortfalls related to border security. The additional funds, if approved, are expected to fund detention spaces, alternative-to-detention tracking programs, and transportation work. Such an increase should benefit CoreCivic, in our view.

And More For Fiscal 2024? In late July, the Homeland Security bill for fiscal 2024 was approved by the full committee in the House. The bill provides $3.55 billion for custody operations, which is more than ever previously appropriated, to fund an average daily ICE detainee population of 41,500, a significant increase from the 34,000 level. While much negotiations remain to be had, such a funding increase would be a strong positive.

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Kratos Defense & Security (KTOS) – Reports Second Quarter Results

Posted on August 8, 2023August 8, 2023 by cpereira@noblefcm.com

Tuesday, August 08, 2023

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative, affordable technology, platforms, and systems for United States National Security related customers, allies, and commercial enterprises. Kratos is changing the way breakthrough technologies for these industries are rapidly brought to market through proven commercial and venture capital backed approaches, including proactive research, and streamlined development processes. At Kratos, affordability is a technology, and we specialize in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training and combat systems and next generation turbo jet and turbo fan engine development. For more information go to www.kratosdefense.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2Q23 Results. Results came in above expectations. Revenue totaled $256.9 million, up 14.6% y-o-y. Adjusted EBITDA came in at $21.6 million, up from $17.7 million in 2Q22. GAAP EPS loss was $0.02 and adjusted EPS was $0.09, compared to a EPS loss of $0.04 and adjusted EPS of $0.07, respectively, a year ago. We had forecasted $235 million, $16.5 million, $(0.03), and $0.06, respectively.

Solid Organic Growth In KGS. The Government Solutions Segment saw overall revenue increase 22.1% to $204.8 million. Organic growth for KGS grew 17.1% in the quarter, with organic growth across all businesses within KGS and notable increases in the Space and Satellite, Turbine Technologies, Microwave products, and C5ISR units.

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CoreCivic, Inc. (CXW) – 2Q23 In Line With Our Expectations

Posted on August 8, 2023August 8, 2023 by cpereira@noblefcm.com

Tuesday, August 08, 2023

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2Q23 Results. Total revenue of $463.7 million, better than our $463.1 million estimate, and up from $456.7 million last year. Adjusted EBITDA of $72.1 million compared to $78.8 million last year and our $73.2 million projection. Net income of $14.8 million, or EPS of $0.13, compared to $10.6 million, or EPS of $0.09, last year. We had forecast net income of $14.4 million, or $0.13 per share.

ICE, ICE Baby. The expiration of COVID related regulations in May has resulted in a 45% increase in ICE populations at CoreCivic facilities through July 31st. We would anticipate ICE populations to increase further as the border situations remains volatile, although politics make predictions challenging.

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Eagle Bulk Shipping (EGLE) – Eagle reports results slightly below expectations, goes all in on shipping improvement

Posted on August 7, 2023August 7, 2023 by cpereira@noblefcm.com

Monday, August 07, 2023

Eagle Bulk Shipping Inc. (“Eagle”) is a US-based drybulk owner-operator focused on the Supramax/Ultramax mid-size asset class, which ranges from 50,000 and 65,000 deadweight tons in size; these vessels are equipped with onboard cranes allowing for the self-loading and unloading of cargoes, a feature which distinguishes them from the larger classes of drybulk vessels and provides for greatly enhanced flexibility and versatility- both with respect to cargo diversity and port accessibility. The Company transports a broad range of major and minor bulk cargoes around the world, including coal, grain, ore, pet coke, cement, and fertilizer. Eagle operates out of three offices, Stamford (headquarters), Singapore, and Hamburg, and performs all aspects of vessel management in-house including: commercial, operational, technical, and strategic.

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Eagle reported 2023-2Q results that were slightly below expectations. Top-line results were slightly above expectations on higher-than-expected TCE rates (increased premium to index prices), but higher TCE reveues were offset by higher than expected operating costs. Adjusted net income/EPS ($16.7m/$1.13) was above our estimate of $7.7m/$0.47, but that was due to an $11.6m gain on the sale of ships. Absent that gain, earnings would have been $5.2m or $0.32 per share.

Management is betting on the shipping market. During the quarter, the company upgraded its fleet by acquiring two scrubber-fitted ships and selling two non-scrubber ships. It also repurchased 3.8m shares (28% of outstanding) at a cost of $221 million and increased its borrowing capacity by $175m.

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