Category: Industrials

Monday, August 3, 2020

Orion Group Holdings (ORN)

Solid Quarter Amidst COVID-19. Increasing EBITDA Estimate.

Orion Group Holdings, based in Houston, Texas, is a specialty construction company within the Marine and Industrial Construction sectors, with operations focused in the continental United States and Caribbean. Revenue is split roughly 50/50 between a Marine Construction segment that provides marine facility, pipeline and structural construction services and a Commercial Concrete segment that provides turnkey concrete services in the light commercial and structural construction markets.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

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

Another strong quarter driven by solid execution, especially in Concrete. 2Q2020 gross profit of $20.7 million and EBITDA of $12.6 million beat our estimates of $18.7 million and $10.5 million, respectively. Revenue was 8% higher than expected. Gross margin of 11.3% and EBITDA margin of 6.9% were ~30-70 basis points better than our estimates. Main driver was stronger-than-expected Concrete EBITDA margin of 3.0%. Marine profitability remained high due to strong execution and solid equipment utilization.

2Q2020 backlog dropped to $528 million versus $610 million in 1Q2020 and $572 million at year-end 2019. Marine dropped $50 million to $312 million and Concrete fell $31 million off a record level to $216 million. Industry fundamentals remain positive despite state level concerns about COVID-19. YTD successful bids total …









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Thursday, July 30, 2020

Orion Group Holdings (ORN)

Another Strong Quarter Despite COVID-19 Fears

Orion Group Holdings, based in Houston, Texas, is a specialty construction company within the Marine and Industrial Construction sectors, with operations focused in the continental United States and Caribbean. Revenue is split roughly 50/50 between a Marine Construction segment that provides marine facility, pipeline and structural construction services and a Commercial Concrete segment that provides turnkey concrete services in the light commercial and structural construction markets.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

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

Another strong quarter driven by solid execution. 2Q2020 gross profit of $20.7 million and EBITDA of $12.6 million beat our estimates of $18.7 million and $10.5 million, respectively. Revenue was 8% higher than expected with gross margin of 11.3% and EBITDA margin of 6.9%, or ~30-70 basis points better than our estimates. One main driver was much higher than expected Concrete EBITDA margin of 3.0%, up from 1.3% in 1Q2020. Marine profitability declined sequentially remain solid due to strong execution and equipment utilization. Please see details for today’s call with management on page two.

2020 EBITDA guidance remains suspended due to uncertainty caused by COVID-19. Minor disruptions seen to date and bidding activity continues in both segments, but management remains cautious amidst uncertainty, similar to many other companies. Our revised estimate is likely to be in …









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*Analyst
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NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Thursday, July 30, 2020

ACCO Brands Corporation (ACCO)

Post 2Q Call Commentary; Lowering PT to $10

ACCO Brands Corporation designs, manufactures, sources, markets, and sells office products, academic supplies, and calendar products primarily in the United States, Canada, Northern Europe, Brazil, Australia, and Mexico. It operates through three segments: ACCO Brands North America, ACCO Brands EMEA, and ACCO Brands International. The company offers office products, such as stapling, binding and laminating equipment, and related consumable supplies, as well as shredders and whiteboards; and academic products, including notebooks, folders, decorative calendars, and stationery products. It also provides private label products, as well as business machine maintenance and repair services. The company offers its business, academic, and calendar product lines under the Artline, AT-A-GLANCE, Derwent, Esselte, Five Star, GBC, Hilroy, Leitz, Marbig, Mead, NOBO, Quartet, Rapid, Rexel, Swingline, Tilibra, Wilson Jones, and other brand names. In addition, it designs, sources, distributes, markets, and sells accessories for laptop and desktop computers, and tablets comprising security products; input devices, such as presenters, mice, and trackballs; ergonomic aids, including foot and wrist rests; docking stations; and other personal computers and tablet accessories under the Kensington, Microsaver, and ClickSafe brand names. The company sells its products to consumers and commercial end-users primarily through resellers, including traditional office supply resellers, wholesalers, mass merchandisers, and retailers, as well as directly to consumers through on-line and direct mail. ACCO Brands Corporation is headquartered in Lake Zurich, Illinois.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

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

Segment Results. North American sales fell 24.7% to $231.7 million while adjusted operating income fell 29.8% to $42.4 million. While back-to-school sales were solid, there were significant declines in the commercial office products space. EMEA sales of $88.3 million fell 31.2% with the segment posting an adjusted operating loss of $1.1 million compared to adjusted operating income of $7.4 million last year. International sales came in at $46.9 million, down 43.2% with an adjusted operating loss of $3.2 million versus $4.4 million of adjusted operating income last year. All segments were impacted by lower demand due to COVID-19.


Cost Reductions. Second quarter cost reductions came in at $33 million, well above management’s previous $20 million estimate. ACCO is taking additional measures to right-size the business in certain markets which should result in an additional …










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*Analyst
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NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Wednesday, July 29, 2020

Great Lakes Dredge & Dock (GLDD)

Gulf Coast LNG Work Secured – 2Q2020 Results Out Next Week

Great Lakes Dredge & Dock Corp is a provider of dredging services in the United States. The company only’s operating segments is Dredging. Dredging involves the enhancement or preservation of navigability of waterways or the protection of shorelines through the removal or replenishment of soil, sand or rock. Its projects portfolio includes Coastal Restoration, Coastal Protection, Port expansion, and others.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

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

Dredging award for third marine berth at Sabine Pass LNG plant. A subcontract has been signed with Bechtel Oil, Gas and Chemicals, Inc., the EPC contractor for an expansion of the Sabine Pass LNG liquefaction plant. The proposed expansion includes the addition of a third marine berth and supporting facilities to handle LNG tankers with capacity in the 125k-180k cubic meter range. GLDD is expected to begin dredging work for the third marine berth in 3Q2020. Limited details available now but award is a positive signal.


2Q2020 results out Tuesday, August 4th at 8:00 am EST with call at 10:00am EST.  Call number is (877) 377-7553 and code is 1658815. The call should reinforce the virtual NDR meeting that we hosted in mid July with Lasse Petterson, President/CEO and Mark Marinko, CFO. The virtual NDR meeting showcased the favorable dredging market outlook and GLDD’s strong market position. A link is available at www.channelchek.com …








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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Wednesday, July 29, 2020

ACCO Brands Corporation (ACCO)

Cost Cutting Efforts Result in Above Expected 2Q EPS but Business Conditions Remain Challenging

ACCO Brands Corporation designs, manufactures, sources, markets, and sells office products, academic supplies, and calendar products primarily in the United States, Canada, Northern Europe, Brazil, Australia, and Mexico. It operates through three segments: ACCO Brands North America, ACCO Brands EMEA, and ACCO Brands International. The company offers office products, such as stapling, binding and laminating equipment, and related consumable supplies, as well as shredders and whiteboards; and academic products, including notebooks, folders, decorative calendars, and stationery products. It also provides private label products, as well as business machine maintenance and repair services. The company offers its business, academic, and calendar product lines under the Artline, AT-A-GLANCE, Derwent, Esselte, Five Star, GBC, Hilroy, Leitz, Marbig, Mead, NOBO, Quartet, Rapid, Rexel, Swingline, Tilibra, Wilson Jones, and other brand names. In addition, it designs, sources, distributes, markets, and sells accessories for laptop and desktop computers, and tablets comprising security products; input devices, such as presenters, mice, and trackballs; ergonomic aids, including foot and wrist rests; docking stations; and other personal computers and tablet accessories under the Kensington, Microsaver, and ClickSafe brand names. The company sells its products to consumers and commercial end-users primarily through resellers, including traditional office supply resellers, wholesalers, mass merchandisers, and retailers, as well as directly to consumers through on-line and direct mail. ACCO Brands Corporation is headquartered in Lake Zurich, Illinois.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

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

2Q20 Results. Revenue of $366.9 million declined 29.3% y-o-y with comp sales off 28.3%. GAAP net income totaled $5.4 million, or $0.06 per share, compared to $35.9 million, or $0.35, last year. Adjusted net income was $11.6 million, or $0.12 per share, versus $36.3 million, or $0.36 per share, in 2Q19. Quarterly results were negatively impacted by the COVID crisis and $6.5 million of restructuring costs.. Results came in at the lower end of management’s guidance of a 25%-40% sales decline and above the guided adjusted EPS of a loss of $0.05 to a positive $0.07. We had forecast revenue at $363 million, net income of $0.02, and adjusted net income of $0.04.


Cost Reductions. Savings from cost reductions reduced 2Q expenses by some $33 million, which drove the positive earnings in the face of the revenue decline. Further actions to focus the business on faster growing categories and channels will result in an expected additional …










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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Wednesday, July 22, 2020

DLH Holdings Corp. (DLHC)

New COVID-19 Business; Virtual NDRS

DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States. The company offers services to several government agencies which include the Department of veteran affairs, Department of health and human services, Department of Defense and other government agencies. It operates primarily through prime contracts and also derives its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

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

COVID-19 Contracts. Yesterday, DLH announced it recently had been awarded multiple task orders and contracts related to COVID-19 testing and analysis. The new awards are expected to add at least $15 million of incremental revenue, with the majority anticipated in calendar 2020. We estimate the additional revenue could add some $1 million of operating income.

Contract Scope. The task orders encompass the evaluation of various treatment alternatives and the impact of COVID-19 on other chronic conditions, as well as the development of health communication tools to exchange emerging data among numerous scientific stakeholders. These efforts are being …









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This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Monday, July 20, 2020

Great Lakes Dredge & Dock (GLDD)

Virtual NDR Meeting Reinforces Favorable Dredging Outlook

Great Lakes Dredge & Dock Corp is a provider of dredging services in the United States. The company only’s operating segments is Dredging. Dredging involves the enhancement or preservation of navigability of waterways or the protection of shorelines through the removal or replenishment of soil, sand or rock. Its projects portfolio includes Coastal Restoration, Coastal Protection, Port expansion, and others.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

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

We hosted a virtual NDR meeting last week with Lasse Petterson, President/CEO and Mark Marinko, CFO, that showcased the favorable dredging market outlook and GLDD’s strong market position.  A link should be available shortly at www.channelchek.com.


Watch the Virtual Road Show Replay

No change in favorable dredging market outlook even though competition has increased. Recent backlog trend has been down, but smaller projects have successfully sustained operating results. News on several large bid opportunities and Jacksonville C in 3Q/4Q2020 should …








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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Tuesday, July 14, 2020

Orion Group Holdings (ORN)

Additional Work Awarded. Outlook Remains Favorable.

Orion Group Holdings, based in Houston, Texas, is a specialty construction company within the Marine and Industrial Construction sectors, with operations focused in the continental United States and Caribbean. Revenue is split roughly 50/50 between a Marine Construction segment that provides marine facility, pipeline and structural construction services and a Commercial Concrete segment that provides turnkey concrete services in the light commercial and structural construction markets.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

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

Dredging award confirmed. Yesterday, ORN confirmed the award of a $14.65 million contract that we discussed in a June 30th research report. There were two other bids, and the work requires dredging ~1.8 million cubic yards of material to maintain channels between the Padre Island jetties and the entrance to Port Mansfield. The work begins in September and will be completed in 1Q2021 so it adds some visibility to late 2020 and early 2021. The work is a small part of the $5 billion of federal funding to USACE for recovery efforts post Hurricane Harvey.

Risk to existing projects is moderating. Despite moves to curb the spread of COVID-19, work continues on the Terminal 5 upgrade and the Fairview Avenue North bridge replacement in Seattle. Also, the crude oil price recovery dampens some risk on the pacing of …









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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Tuesday, July 7, 2020

Great Lakes Dredge & Dock (GLDD)

New Awards total $51.1 million. Positive Dredging Market Outlook Intact.

Great Lakes Dredge & Dock Corp is a provider of dredging services in the United States. The company only’s operating segments is Dredging. Dredging involves the enhancement or preservation of navigability of waterways or the protection of shorelines through the removal or replenishment of soil, sand or rock. Its projects portfolio includes Coastal Restoration, Coastal Protection, Port expansion, and others.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

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

Several awards announced. Total awards of $51.1 million include Coastal Protection work of $44.0 million and Maintenance work of $7.1 million. Please see page two for more details.


No change in dredging market outlook, but competition has increased. The recent backlog trend has been down and backlog has dropped over the past two quarters to $475 million, but smaller projects have successfully sustained operating results, including a record 1Q2020. News expected this quarter on several large opportunities and …








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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Tuesday, June 30, 2020

Orion Group Holdings (ORN)

Additional Work Awarded. Outlook Remains Favorable.

Orion Group Holdings, based in Houston, Texas, is a specialty construction company within the Marine and Industrial Construction sectors, with operations focused in the continental United States and Caribbean. Revenue is split roughly 50/50 between a Marine Construction segment that provides marine facility, pipeline and structural construction services and a Commercial Concrete segment that provides turnkey concrete services in the light commercial and structural construction markets.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

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

Dredging award announced by US Army Corp of Engineers (USACE) late last week. ORN was awarded a $14.65 million contract for pipeline dredging in Port Mansfield, Texas. Bids were solicited via the internet with three received, and the contract was published on the Department of Defense web site. ORN has not yet issued a press release on the work, which has an estimated completion date of March 1, 2021.

Risk to existing projects is moderating. Despite moves to curb the spread of COVID-19, work in Seattle continues on the Terminal 5 upgrade and the Fairview Avenue North bridge replacement. Also, the solid rebound in crude oil prices also dampens some risk on…









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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
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NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Thursday, June 18, 2020

Orion Group Holdings (ORN)

Added Marine Awards and Compelling Risk/Reward Profile.

Orion Group Holdings, based in Houston, Texas, is a specialty construction company within the Marine and Industrial Construction sectors, with operations focused in the continental United States and Caribbean. Revenue is split roughly 50/50 between a Marine Construction segment that provides marine facility, pipeline and structural construction services and a Commercial Concrete segment that provides turnkey concrete services in the light commercial and structural construction markets.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

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

New Marine awards of $17 million are positive. Two new dredging contracts were awarded for work in Corpus Christi. The first award of ~$10 million was competitively bid to the US Army Corps of Engineers (USACE) for dredging of a section of the Corpus Christi Ship Channel. The other project involves $7 million of dredging work at a marine terminal for a private client. Work on both projects is scheduled for completion in 1Q2021.

Risks to existing projects is moderating. Despite moves, like adopting preventative measures to curb the spread of COVID-19 in Seattle, work continues on the Terminal 5 upgrade and the Fairview Avenue North bridge replacement. The solid rebound in crude oil prices also…









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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Thursday, June 18, 2020

CoreCivic (CXW)

Suspends Dividend; Evaluating Corporate Structure and Capital Allocation

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 corrections and detention management, a growing network of residential reentry centers to help address America’s recidivism crisis, and government real estate solutions. We are a publicly traded real estate investment trust and the nation’s largest owner of partnership correctional, detention and residential reentry facilities. We also believe we are the largest private owner of real estate used by U.S. government agencies. The Company has been a flexible and dependable partner for government for more than 35 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.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

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

Business Evaluation. Yesterday, CoreCivic announced that it is evaluating corporate structure and capital allocation alternatives. We interpret this to mean a potential move away from the REIT structure to a regular “C” corporate structure. The Company expects to finalize its evaluation by the end of the third quarter.


Suspending Dividend. In addition, CoreCivic suspended its quarterly dividend. According to management, the Company does expect to maintain its REIT status for 2020 given reduced required distributions under the CARES Act. Suspension of the dividend frees up roughly $53 million quarterly. Depending on the outcome of…

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Thursday, May 7, 2020

DLH Holdings Corp. (DLHC)

Beats Top and Bottom Lines; Expect VA-CMOP to be Extended

DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States. The company offers services to several government agencies which include the Department of veteran affairs, Department of health and human services, Department of Defense and other government agencies. It operates primarily through prime contracts and also derives its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

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

2Q20 Results. Revenue of $54.8 million and EPS of $0.16. We were projecting revenue of $54 million and EPS of $0.14, while consensus was $52.6 million and $0.13, respectively. Last year, revenues were $33.8 million and EPS was $0.10. The y-o-y revenue increase includes the S3 contribution while the Company’s legacy operations also grew steadily, reflecting increased volume to the VA and other agencies.

VA-CMOP Extension? During the quarter, the government canceled the previously-issued RFP for the VA pharmacy contracts. The RFP included a requirement that the prime contractor be a service-disabled veteran owned small business, which would have precluded DLH from continuing in the prime contractor role. Although the government has not indicated its future procurement strategy, we would expect DLH’s current contracts for these services to be extended for…






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This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision.