Notable Earnings: Comtech Telecommunications Corp. (CMTL)

Comtech Telecommunications Corp. (NASDAQ:CMTL) reported earnings for the three months ended April 2016 on June 08, 2016. The company earned $-0.89 per share on revenue of $124.19M. Analysts had been modeling earning per share of $-1.66 with $128.9M in revenue.

Comtech Telecommunications Corp. (NASDAQ:CMTL) reported its operating results for the three and nine months ended April 30, 2016. Net sales for the three months ended April 30, 2016 were $124.2 million compared to $71.6 million for the three months ended April 30, 2015. Net sales for the nine months ended April 30, 2016 were $258.6 million compared to $229.8 million for the nine months ended April 30, 2015. The increase in net sales for both periods reflects incremental sales of approximately $66.0 million as a result of the acquisition of TeleCommunication Systems, Inc. (“TCS,”) partially offset by lower sales of legacy Comtech products. As previously announced, the TCS acquisition closed on February 23, 2016. The Company achieved bookings of approximately $139.2 million during the third quarter of fiscal 2016 which translates into a quarterly book-to-bill ratio (a measure of quarterly bookings divided by quarterly net sales) of 1.12 compared with an average book-to-bill ratio of 0.81 for the prior two quarters.

Operating net loss was $13.4 million and $8.0 million for the three and nine months ended April 30, 2016, respectively as compared to operating income of $7.2 million and $26.0 million for the three and nine months ended April 30, 2015, respectively. During the three and nine months ended April 30, 2016, we expensed $17.0 million and $20.7 million, respectively, of pre-tax acquisition plan expenses, almost all of which relates to the Company’s acquisition of TCS. Excluding these expenses, we would have reported operating income for the three and nine months ended April 30, 2016 of $3.6 million and $12.7 million, respectively.

GAAP net loss was $14.4 million, or $(0.89) per diluted share, for the three months ended April 30, 2016 as compared to GAAP net income of $5.0 million, or $0.30 per diluted share, for the three months ended April 30, 2015. GAAP net loss was $10.4 million, or $(0.65) per diluted share, for the nine months ended April 30, 2016 as compared to GAAP net income of $17.8 million, or $1.08 per diluted share, for the nine months ended April 30, 2015.

Selected Fiscal 2016 Third Quarter Financial Metrics and Other Items

  • The Company notes that its fiscal 2016 updated financial guidance reflects only five full months of TCS operations as a result of the closing of the TCS acquisition on February 23, 2016. Comtech’s fourth fiscal quarter will reflect a full three months of combined operations.
  • As of April 30, 2016, the Company had $69.1 million of cash and cash equivalents before payment of its quarterly dividend of $4.9 million on May 20, 2016. However, after payment of the May 20, 2016 dividend and other remaining transaction and merger related expenditures, the Company now has approximately $50.0 million of cash and cash equivalents.
  • The Company’s effective tax rate for fiscal 2016 will be impacted by various items including the non-deductibility of transaction related expenses incurred in connection with the TCS acquisition. Looking forward, the Company currently expects that its fiscal 2017 effective tax rate, excluding discrete items will approximate 37.5%.
  • The Company’s interest expense for the third quarter reflects, and going forward will continue to reflect the cost of borrowing in part for the TCS acquisition and the discharge of TCS’s debt. As of April 30, 2016, total debt outstanding, net of $6.2 million of deferred financing costs and including capital lease obligations, was $351.2 million, of which $17.8 million was current. The blended interest expense rate during the fourth quarter of fiscal 2016 is expected to approximate 5.0% (including amortization of deferred financing charges). Looking forward to fiscal 2017, the Company currently expects that the blended interest rate on its total debt will approximate 5.0%.
  • The Company has completed a preliminary analysis and assessment of the fair values of the TCS assets acquired and liabilities assumed. Based on this preliminary analysis, $280.9 million was allocated to intangibles with definite lives and $127.1 million was allocated to goodwill. Total amortization of intangibles during the fourth quarter of fiscal 2016 (including amortization associated with the TCS assets acquired) is expected to approximate $6.0 million. Based on this preliminary analysis, total annual amortization of intangibles with definite lives in fiscal 2017, based on this preliminary analysis and assessment, is expected to approximate $22.8 million.
  • Backlog as of April 30, 2016 was $433.6 million compared to $92.6 million as of January 31, 2016. Backlog as of April 30, 2016 includes the acquired backlog of TCS. Total bookings for the three and nine months ended April 30, 2016 were $139.2 million and $248.5 million compared to $72.2 million and $226.4 million for the three and nine months ended April 30, 2015.

Comtech Telecommunications Corp. earnings per share showed an increasing trend of 3.7% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 49%.Analysts project EPS growth over the next 5 years at 17%. It has EPS annual decline over the past 5 fiscal years of -5.8% when sales declined -17. It reported 73.5% sales growth, and -392.8% EPS decline in the last quarter.

The stock is trading at $13.53, up -0.37% from 52-week low of $13.49. The stock trades down -53.95% from its peak of $30.93 and % below the consensus price target of $23.7. Its volume clocked up at 0.89 million shares which is higher than the average volume of 0.26 million shares. Its market capitalization currently stands at $219.93M.

Momentum Stock: Francesca’s Holdings Corp. (NASDAQ:FRAN)

Francesca’s Holdings Corporation (NASDAQ:FRAN) reported earnings for the three months ended April 2016 on June 09, 2016. The company earned $0.18 per share on revenue of $106.11M. Analysts had been modeling earning per share of $0.17 with $106.76M in revenue.

Francesca’s Holdings Corporation (NASDAQ:FRAN) reported financial results for the first quarter ended April 30, 2016.

  • Net sales increased 12% to $106.1 million
  • Comparable sales increased 2%, including an ecommerce comparable sales increase of 38%
  • Diluted earnings per share was $0.18

FIRST QUARTER RESULTS

Net sales increased 12% to $106.1 million from $95.0 million in the comparable prior year period.  This increase was due to a 2% increase in comparable sales driven by an increase in the number of transactions both at the boutiques and on-line as well as the opening of 48 net new boutiques since the comparable prior year period.  We opened 22 new boutiques and closed one underperforming boutique during the quarter bringing our total boutique count to 637 as of April 30, 2016.  Ecommerce comparable sales increased 38% to $5.2 million driven by increased website traffic and conversion rates.

Gross profit, as a percentage of net sales, decreased to 46.3% from 47.3% in the prior year quarter.  This decrease is attributable to 60 basis points decrease in merchandise margin and 30 basis points deleveraging of occupancy costs.  The decrease in merchandise margin was due to increased clearance activity and sales mix changes during the quarter compared to the same period last year.

Selling, general and administrative expenses (“SG&A”) increased 14% to $37.7 million from $33.0 million in the prior year quarter. The increase in SG&A expenses is primarily due to increased corporate and boutique payroll expense to support the larger boutique base and strategic initiatives.  Additionally, stock-based compensation expense increased compared to last year in connection with the performance-based restricted stock awarded to executives and certain key employees in March 2016 aligning incentive compensation with the Vision 2020 plan.  Professional fees were also higher in support of various strategic and operational initiatives.

Income from operations was $11.5 million, or 10.8% of net sales, compared to $11.9 million, or 12.5% of net sales, in the prior year quarter.

BALANCE SHEET SUMMARY

Total cash and cash equivalents at the end of the quarter were $35.4 million compared to $46.1 million at the end of the comparable prior year quarter.

We ended the quarter with $34.8 million of inventory on hand compared to $31.4 million at the comparable prior year period.  Average ending inventory per boutique increased by 2% versus the comparable prior year period.

During the first quarter, we repurchased approximately 925,000 shares of our common stock at a cost of $16.8 million.  Subsequent to the end of the quarter through May 31, 2016, we repurchased an additional 728,000 shares of our common stock at a cost of $9.5 million.

Francesca’s Holdings Corporation earnings per share showed an increasing trend of 19.6% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 97%.Analysts project EPS growth over the next 5 years at 10%. It has EPS annual growth over the past 5 fiscal years of 17% when sales grew 26.6. It reported 11.7% sales growth, and 5.4% EPS growth in the last quarter.

The stock is trading at $10.81, up 10.87% from 52-week low of $9.75. The stock trades down -45.68% from its peak of $19.9 and % below the consensus price target of $13.56. Its volume clocked up at 0.68 million shares which is lower than the average volume of 1.45 million shares. Its market capitalization currently stands at $431.28M.

Momentum Stock: Box, Inc (NYSE:BOX)

Box, Inc. (NYSE:BOX) reported earnings for the three months ended April 2016 on June 01, 2016. The company earned $-0.18 per share on revenue of $90.15M. Analysts had been modeling earning per share of $-0.24 with $88.65M in revenue.

Box, Inc. (NYSE:BOX) announced financial results for the first quarter of fiscal 2017, which ended April 30, 2016.

“In the first quarter, we achieved a marked improvement in cash flow from operations of negative $4.2 million and, excluding a payment related to a litigation settlement, would have achieved near breakeven cash flow from operations of negative $500,000,” said Dylan Smith, co-founder and CFO of Box. “We are confident in our growth opportunity, driven by our product differentiation and expanding market, and we remain committed to achieving positive free cash flow in the fourth quarter of this fiscal year.”

Fiscal First Quarter Financial Highlights

  • Revenue for the first quarter of fiscal 2017 was a record $90.2 million, an increase of 37% from the first quarter of fiscal 2016.
  • Deferred revenue for the first quarter of fiscal 2017 ended at $172.2 million, an increase of 39% from the first quarter of fiscal 2016.
  • Billings in the first quarter of fiscal 2017 were $75.9 million, an increase of 9% from the first quarter of fiscal 2016. As previously announced, billings were impacted by increasing seasonality in the business and the focus on annual payment durations from multi-year prepayments, beginning this fiscal year.
  • GAAP operating loss in the first quarter of fiscal 2017 was $38.6 million, or 43% of revenue. This compares to GAAP operating loss of $46.6 million, or 71% of revenue, in the first quarter of fiscal 2016. Non-GAAP operating loss in the first quarter of fiscal 2017 was $22.7 million, or 25% of revenue. This compares to non-GAAP operating loss of $32.6 million, or 50% of revenue, in the first quarter of fiscal 2016.
  • GAAP net loss per share, basic and diluted, in the first quarter of fiscal 2017 was $0.31 on 124.9 million shares outstanding, compared to $0.40 in the first quarter of fiscal 2016 on 119.4 million shares outstanding. Non-GAAP net loss per share, basic and diluted, in the first quarter of fiscal 2017 was $0.18, compared to $0.28 in the first quarter of fiscal 2016.
  • Net cash used in operating activities in the first quarter of fiscal 2017 totaled $4.2 million, and excluding the $3.8 million payment related to the settlement of the previously announced Open Text litigation, net cash used in operating activities would have been $0.5 million. In the first quarter of fiscal 2016, net cash used in operating activities was $32.2 million, and excluding $25.0 million in restricted cash used to secure a line of credit for the newly leased Redwood City headquarters, net cash used in operating activities would have been $7.2 million.

Box, Inc. earnings per share showed a decreasing trend of -10.1% for the current fiscal year. The company’s expected EPS decline rate for next fiscal year is -48%.Analysts project EPS growth over the next 5 years at 73.9%. It has EPS annual decline over the past 5 fiscal years of 0% when sales declined 0. It reported 37.5% sales growth, and 22% EPS growth in the last quarter.

The stock is trading at $11.45, up 29.82% from 52-week low of $8.82. The stock trades down -42.55% from its peak of $19.93 and 51.79% above the consensus price target of $17.38. Its volume clocked up at 1.16 million shares which is higher than the average volume of 0.89 million shares. Its market capitalization currently stands at $1.40B.

Momentum Stock in Focus: HD Supply Holdings, Inc. (HDS)

HD Supply Holdings, Inc. (NASDAQ:HDS) reported earnings for the three months ended April 2016 on June 07, 2016. The company earned $0.51 per share on revenue of $1.78B. Analysts had been modeling earning per share of $0.47 with $1.84B in revenue.

HD Supply Holdings, Inc. (NASDAQ:HDS) reported Net sales of $1.8 billion for the first quarter of fiscal 2016 ended May 1, 2016, an increase of $121 million, or 7.3 percent, as compared to the first quarter of fiscal 2015.  The company believes its sales performance represents growth of approximately 400 basis points in excess of its market growth estimate.

  • Net Sales increased 7 percent to $1,781 million ($1,844 million including Interior Solutions)
  • Operating Income improved 14 percent to $178 million
  • Adjusted EBITDA increased 14 percent to $215 million

Gross profit increased $50 million, or 8.9 percent, to $609 million for the first quarter of fiscal 2016 as compared to $559 million for the first quarter of fiscal 2015. Gross profit was 34.2 percent of Net sales for the first quarter of fiscal 2016, up approximately 50 basis points from 33.7 percent of Net sales for first quarter of fiscal of 2015.

Operating income increased $22 million, or 14.1 percent, to $178 million for the first quarter of fiscal 2016 as compared to $156 million for the first quarter of fiscal 2015. Operating income as a percentage of Net sales was 10.0 percent for the first quarter of fiscal 2016, up approximately 60 basis points from 9.4 percent for the first quarter of fiscal 2015.

Net income decreased $256 million to a Net loss of $14 million for the first quarter of fiscal 2016 as compared to $242 million Net income for the first quarter of fiscal 2015. The decrease in Net income (loss) was due to a $115 million loss incurred as a result of the extinguishment of outstanding debt in the first quarter of fiscal 2016 and a $189 million tax benefit in the first quarter of fiscal 2015 as a result of IRS and state audit settlements.  Net loss per diluted share was $0.07 for the first quarter of fiscal 2016, as compared to a Net income per diluted share of $1.21 for the first quarter of fiscal 2015.

Adjusted EBITDA increased $26 million, or 13.8 percent, to $215 million for the first quarter of fiscal 2016 as compared to $189 million for the first quarter of fiscal 2015. Adjusted EBITDA as a percentage of Net sales was 12.1 percent for the first quarter of fiscal 2016, up approximately 70 basis points from 11.4 percent for the first quarter of fiscal 2015.

Adjusted net income increased $52 million to $103 million for the first quarter of fiscal 2016 as compared to $51 million for the first quarter of fiscal 2015.  Adjusted net income per diluted share was $0.51 for the first quarter of fiscal 2016, as compared to $0.25 for the first quarter of fiscal 2015.

As of May 1, 2016, HD Supply’s combined liquidity of approximately $1,268 million was comprised of $203 million in cash and cash equivalents and $1,065 million of additional available borrowings under HD Supply, Inc.’s senior asset-backed lending facility, based on qualifying inventory and receivables.

HD Supply Holdings, Inc. earnings per share showed an increasing trend of 56.3% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 322%.Analysts project EPS growth over the next 5 years at 34.54%. It has EPS annual growth over the past 5 fiscal years of 27.7% when sales grew 2.8. It reported 7.3% sales growth, and -106% EPS decline in the last quarter.

The stock is trading at $35.27, up 65.9% from 52-week low of $21.26. The stock trades down -4.18% from its peak of $36.81 and % below the consensus price target of $40.46. Its volume clocked up at 1.84 million shares which is higher than the average volume of 1.78 million shares. Its market capitalization currently stands at $7.01B.

Looking At Post-Earnings Stock Movement: Verint Systems Inc. (NASDAQ:VRNT)

Verint Systems Inc. (NASDAQ:VRNT) reported earnings for the three months ended April 2016 on June 07, 2016. The company earned $0.46 per share on revenue of $245.42M. Analysts had been modeling earning per share of $0.41 with $250.71M in revenue.

Verint Systems Inc. (NASDAQ:VRNT) announced results for the three months ended April 30, 2016.

Financial Highlights

Below is selected unaudited financial information for the three months ended April 30, 2016 prepared in accordance with generally accepted accounting principles (“GAAP”) and not in accordance with GAAP (“non-GAAP”).

CEO Commentary

“We are pleased to report that in Q1 we delivered non-GAAP revenue of $249 million, or $251 million on a constant currency basis, and $0.46 of non-GAAP diluted EPS. In Enterprise Intelligence, revenue increased 6.5% year-over-year on a constant currency basis and we expect a year of growth driven by our broad portfolio of Customer Engagement Optimization solutions, all available now on-premises, in the cloud and in hybrid deployment models,” said Dan Bodner, CEO and President.

(1) Non-GAAP revenue on a constant currency basis was $251.0 million for the three months ended April 30, 2016. Please see Table 6 and “Supplemental Information about Non-GAAP Financial Measures” at the end of this press release for more information.

Financial Outlook

Below is Verint’s non-GAAP outlook for the year ending January 31, 2017.

  • We expect revenue as follows:
  • In our Enterprise Intelligence segment, we expect mid-to-high single digit revenue growth.
  • In our Security Intelligence segments, we expect a decline in revenue of between 10% to 15%.
  • Based on the above, for the year ending January 31, 2017, we expect total revenue to be similar to the year ended January 31, 2016, +/- 2.0% and diluted earnings per share to be similar to the year ended January 31, 2016.

Verint Systems Inc. earnings per share showed a decreasing trend of -46.2% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 331%.Analysts project EPS growth over the next 5 years at 9.33%. It has EPS annual decline over the past 5 fiscal years of -1.8% when sales grew 9.2. It reported -8.9% sales drop, and 0% EPS decline in the last quarter.

The stock is trading at $35.24, up 18.41% from 52-week low of $29.76. The stock trades down -43.78% from its peak of $62.5 and % below the consensus price target of $39.67. Its volume clocked up at 0.29 million shares which is lower than the average volume of 0.79 million shares. Its market capitalization currently stands at $2.15B.

Hot Stock to Track After Earnings: Thor Industries Inc. (NYSE:THO)

Thor Industries Inc. (NYSE:THO) reported earnings for the three months ended April 2016 on June 06, 2016. The company earned $1.51 per share on revenue of $1.28B. Analysts had been modeling earning per share of $1.43 with $1.29B in revenue.

Thor Industries Inc. (NYSE:THO) announced net income from continuing operations of $79.2 million, or $1.51 per diluted share, on revenues of $1.28 billion for the third quarter ended April 30, 2016.  Net income from continuing operations increased 24.6% on sales growth of 9.4% when compared with the third quarter of last year.  Diluted earnings per share from continuing operations in the third quarter increased 26.9% compared to the previous year.  Diluted earnings per share, including the loss from discontinued operations in the quarter, also rose 27.4% to $1.49 compared with the third quarter of 2015.

Third-Quarter Highlights:

  • Sales from continuing operations for the third quarter of fiscal 2016 were a record $1.28 billion, up 9.4% from $1.17 billion in the third quarter last year. Sales of towable and motorized RVs posted combined growth of 5.8%, which was supplemented by $41.9 million in net revenues from Postle Aluminum Co., which was acquired on May 1, 2015.
  • Gross profit margins increased to 15.7% in the third quarter compared to 14.2% in the prior-year period, due primarily to improved volumes, favorable changes in product mix and improvements in material costs compared to the prior year.
  • Net income from continuing operations for the third quarter was a record $79.2 million, up 24.6% from $63.6 million in the prior-year third quarter.
  • Diluted earnings per share (EPS) from continuing operations for the third quarter was a record $1.51, up 26.9% from $1.19 in the third quarter last year. Diluted earnings per share, including the loss from discontinued operations, was $1.49, up 27.4% from $1.17 in the third quarter last year.
  • Consolidated RV backlog on April 30, 2016 was $1.06 billion, up 45.4% from $726.8 million on April 30, 2015.
  • Total dealer inventory increased 1.0% to 82,100 units on April 30, 2016 from 81,300 units on April 30, 2015.
  • Thor’s total cash balances as of April 30, 2016 were $247.3 million.

Towable RVs:

  • Towable RV sales were $934.6 million for the third quarter, up 1.7% from $919.4 million in the prior-year period, driven primarily by increasing sales of lower-priced travel trailers partially offset by lower sales of fifth wheel units.
  • Towable RV income before tax was $96.9 million, up 15.7% from $83.8 million in the third quarter last year. This increase was driven primarily by favorable product mix and improved material costs.
  • Towable RV backlog increased 50.2% to $727.5 million, compared to $484.2 million at the end of the third quarter of fiscal 2015, reflecting the continued growth in the towable markets and strong acceptance of the Company’s products.

Motorized RVs:

  • Motorized RV sales were $307.6 million for the third quarter, up 20.7% from $254.9 million in the prior-year third quarter. The increase in motorized RV sales is a result of strong dealer and consumer response to new products, particularly more moderately priced Gas Class A and Class C motorhomes targeting new consumers entering the market combined with overall market growth.
  • Motorized RV income before tax was $24.1 million, up 21.5% from $19.9 million last year, driven primarily by the growth in motorized sales.
  • Motorized RV backlog increased 35.7% to $329.3 million from $242.6 million a year earlier, reflecting the continued strong reception, by dealers and consumers, to the new products introduced over the past year.

Thor Industries Inc. earnings per share showed an increasing trend of 15.3% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 511%.Analysts project EPS growth over the next 5 years at 8.7%. It has EPS annual growth over the past 5 fiscal years of 12.8% when sales grew 12. It reported 9.4% sales growth, and 26.7% EPS growth in the last quarter.

The stock is trading at $66.3, up 40.72% from 52-week low of $47.56. The stock trades down -4.52% from its peak of $69.76 and % below the consensus price target of $73.88. Its volume clocked up at 0.64 million shares which is higher than the average volume of 0.49 million shares. Its market capitalization currently stands at $3.43B.