Metro fiber comeback story abvt reported its Q4 earnings this morning, closing the book on what was one of the few unequivocally positive stories amidst the economic turmoil of 2009. Revenues, EBITDA, and capex were all inline with guidance and perhaps slightly above analyst expectations. Earnings per share of $7.96 included a huge non-cash income tax benefit, probably due to advance recognition of NOLs – GAAP can be strange sometimes. Here is a quick table putting their results in context.
|$ in millions||Q1/09||Q2/09||Q3/09||Q4/09||2010 Guidance|
|EBITDA Margin||44.7%||43.8%||44.0%||41.6%||inline with 2009|
1Not including the non-cash tax benefit
If there is anything to complain about, it is that expenses rose more quickly than in past quarters, as seen in the lower EBITDA margin number. ‘Lower’ but certainly not ‘low’, as it remains above 40% and guidance is for similar margins overall in 2010. Capex also increased, although guidance did predict a rise. Overall, it appears to me that this spending represents preparations for the further expansion the company has been telegraphing in 2010. More sales personnel, more equipment, etc.
You can see that in capex guidance as well, which implies that Q4’s higher capex number will be the norm this year – nearly 40% of revenue. Their business is making more and more cash, and they are obviously planning to take that cash and plow it back in for future growth. They have guided revenue growth at about 10% for 2010, which is a nice conservative number given the continued uncertain economic outlook.
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