Ankündigung • Nov 15
H2O Innovation Inc. Expands Its Offices to Consolidate Business Operations in Texas H2O Innovation Inc. announced that it is relocating its Cypress and Spring Operation & Maintenance (O&M) offices into a single and larger industrial facility to better serve its clients and expand its market presence in the Houston area. Since H2O Innovation entered the Houston market with the acquisition of Hays Utility South Corporation (Hays) in 2018 and Gulf Utility Service Inc. (GUS) in 2020, it has experienced significant growth. This transition will consolidate and relocate the Corporation's O&M offices in Texas to streamline its operations in one single 24,500 square foot industrial facility. The key improvements in H2O Innovation's new facility include a customer service desk designed to cater to over 65 Municipal Utility Districts (MUD), Public Utility Districts, private water systems and industrial clients, which represent more than 37,448 connections, a new call-in center, as well as more convenient premises and modern equipment for the Corporation's 97 employees in Houston. The new facility's more functional parking lot will also provide increased convenience and ease of access for H2O Innovation's clients. Furthermore, H2O Innovation will use an adjacent 1.5-acre laydown yard to optimize its service vehicle operations, as this new space will accommodate the Corporation's fleet of over 100 vehicles. This relocation thus involves growth potential and aligns with H2O Innovation’s objectives of expanding its market presence and fortifying its operational capabilities. The negotiations were facilitated by Transwestern Real Estate Services (TRS), a trusted partner in this pivotal move. The Corporation's relocation to the new facility is expected to take place in November 2023. Ankündigung • Nov 01
H2O Innovation Inc. to Report Q1, 2024 Results on Nov 14, 2023 H2O Innovation Inc. announced that they will report Q1, 2024 results at 8:00 AM, Eastern Standard Time on Nov 14, 2023 Ankündigung • Oct 05
Funds managed by Ember Infrastructure Management, LP, Investissement Québec, Caisse de dépôt et placement du Québec and the key executives of H2O Innovation Inc. entered into a definitive agreement to acquire H2O Innovation Inc. (TSX:HEO) from Investissement Québec, Caisse de dépôt et placement du Québec, the key executives and others for approximately CAD 380 million. Funds managed by Ember Infrastructure Management, LP, Investissement Québec, Caisse de dépôt et placement du Québec and the key executives of H2O Innovation Inc. entered into a definitive agreement to acquire H2O Innovation Inc. (TSX:HEO) from Investissement Québec, Caisse de dépôt et placement du Québec, the key executives and others for approximately CAD 380 million on October 3, 2023. Ember Infrastructure will acquire all of the issued and outstanding common shares in the capital of H2O Innovation, other than the shares to be rolled over by Investissement Québec (“IQ”), Caisse de dépôt et placement du Québec (“CDPQ”) and the key executives of the Corporation (collectively, the “Rollover Shareholders”), for CAD 4.25 in cash per share. As part of the transaction, IQ has agreed to roll over all of its shares and increase its existing equity ownership in H2O Innovation by acquiring approximately CAD 20 million of additional shares for an amount per share equal to the consideration. Furthermore, CDPQ has agreed to roll over the majority of its shares and the key executives of H2O Innovation have agreed to roll over a portion of their shares for an amount per share equal to the consideration. Upon completion of the transaction, Ember will be the controlling shareholder of H2O Innovation, with IQ, CDPQ and the key executives of H2O Innovation, together, holding an equity interest in H2O Innovation of approximately 21%. Ember is funding its portion of the purchase price with capital it manages on behalf of its limited partners via private equity fund capital as well as select co-investors, including funds affiliated with the Ontario Power Generation Inc. Pension Fund. Pursuant to the agreement, H2O Innovation has a 30-day go-shop period that will extend from October 3, 2023 to November 2, 2023, during which Scotia Capital Inc. will solicit third-party interest in submitting a proposal which is superior to the proposal made by Ember. Upon closing of the transaction, H2O Innovation shares will be delisted from the TSX. H2O Innovation’s head office will remain in the Province of Québec.
The transaction is subject to court approval and H2O Innovation shareholders. H2O Innovation’s board of directors unanimously approved the transaction. The transaction is not subject to any financing condition and is expected to close in the fourth quarter of 2023. Norton Rose Fulbright Canada LLP is H2O Innovation’s legal counsel, Weil, Gotshal & Manges LLP and Davies Ward Phillips & Vineberg LLP are legal counsel to Ember, Fasken Martineau DuMoulin LLP is legal counsel to IQ and Blake, Cassels & Graydon LLP is legal counsel to CDPQ. Scotia Capital Inc. acted as exclusive financial advisor and fairness opinion provider to H2O Innovation and Desjardins Capital Markets acted as independent financial advisor and fairness opinion provider to the special committee of board of directors of H2O Innovation. Raymond James acted as financial advisor to Ember. Price Target Changed • Oct 05
Price target increased by 10.0% to CA$4.11 Up from CA$3.74, the current price target is an average from 9 analysts. New target price is approximately in line with last closing price of CA$4.18. Stock is up 98% over the past year. The company is forecast to post earnings per share of CA$0.06 next year compared to a net loss per share of CA$0.014 last year. Ankündigung • Sep 30
H2O Innovation Inc., Annual General Meeting, Dec 05, 2023 H2O Innovation Inc., Annual General Meeting, Dec 05, 2023. Reported Earnings • Sep 27
Full year 2023 earnings: Revenues exceed analysts expectations while EPS lags behind Full year 2023 results: CA$0.014 loss per share (down from CA$0.058 profit in FY 2022). Revenue: CA$253.3m (up 37% from FY 2022). Net loss: CA$1.30m (down 125% from profit in FY 2022). Revenue exceeded analyst estimates by 2.0%. Earnings per share (EPS) missed analyst estimates. Revenue is forecast to grow 6.5% p.a. on average during the next 3 years, compared to a 10% growth forecast for the Machinery industry in Canada. Over the last 3 years on average, earnings per share has increased by 51% per year but the company’s share price has only increased by 16% per year, which means it is significantly lagging earnings growth. Major Estimate Revision • Sep 21
Consensus EPS estimates fall by 20% The consensus outlook for fiscal year 2023 has been updated. 2023 EPS estimate fell from CA$0.017 to CA$0.013 per share. Revenue forecast steady at CA$248.8m. Net income forecast to grow 76% next year vs 14% growth forecast for Machinery industry in Canada. Consensus price target of CA$3.74 unchanged from last update. Share price fell 10% to CA$2.47 over the past week. Ankündigung • Sep 14
H2O Innovation Inc. to Report Q4, 2023 Results on Sep 27, 2023 H2O Innovation Inc. announced that they will report Q4, 2023 results at 8:00 AM, Eastern Daylight on Sep 27, 2023 Buying Opportunity • Aug 18
Now 21% undervalued after recent price drop Over the last 90 days, the stock is down 2.8%. The fair value is estimated to be CA$3.53, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 21% over the last 3 years. Meanwhile, the company has become profitable. Revenue is forecast to grow by 19% in 2 years. Earnings is forecast to grow by 169% in the next 2 years. Buying Opportunity • Jul 26
Now 21% undervalued Over the last 90 days, the stock is up 15%. The fair value is estimated to be CA$3.94, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 21% over the last 3 years. Meanwhile, the company has become profitable. Revenue is forecast to grow by 19% in 2 years. Earnings is forecast to grow by 178% in the next 2 years. Ankündigung • Jul 14
H2O Innovation Inc. Officializes Launch of Its Mobile Fleet and Increases Blue Loan Credit Facility by $10 Million to Support It H2O Innovation Inc. announced to launch its mobile fleet of water and wastewater treatment systems and secure three new leasing contracts totaling $3.4 million. This new service offering will require CAPEX investment, which is made possible by the recent agreement with National Bank of Canada on June 30, 2023. This agreement led to a $10 million increase in the Corporation's Blue Loan credit facility, which now stands at $75 million. This strategic initiative should enable H2O Innovation to broaden its range of services, strengthen its customer relationships through the sale of consumables required to operate the fleet assets, and thus improve its profit margins. As part of its mission to offer comprehensive solutions for industrial and municipal clients in North America, H2O Innovation is launching its mobile fleet of Water Technologies & Services (WTS) business line. The Corporation designs and manufactures two different types of mobile water treatment systems: the FlexBoxTM line, which comprises containerized ultrafiltration (UF) or reverse osmosis (RO) systems designed for drinking water treatment, industrial wastewater and water reuse, as well as the SILOTM system, which employs membrane bioreactor (MBR) technology and is specifically designed for wastewater and water reuse treatment. Over the last two years, H2O Innovation has manufactured a fleet of 9 mobile units. Due to the demand in this market sector, the Corporation is expanding its fleet with the objective of reaching 40 units within the next five years. Recently, the Corporation was awarded three new contracts for the supply of mobile units, including the FlexBoxTM RO, FlexBoxTM UF, and SILOTM technologies for an aggregate value of $3.4 M. Once designed and manufactured, two FlexBoxTM UF units will be delivered and leased for an initial period of 18 months to a mining client in Eastern USA. The second project awarded to the Corporation is for a 12-month lease of two SILOTM units for a private sector client in Quebec. Finally, the third contract involves the 24-month lease of a FlexBoxTM RO system to be deployed to a First Nation community in Western Canada. These three projects served as the driving force behind the Corporation's decision to expand its mobile fleet, which will consist of 14 units. The need for an increased capacity and availability became evident and prompted H2O Innovation to take action. A larger fleet will allow the Corporation to better meet the growing demand and provide its clients with access to safe water and sanitation whenever and wherever they require it. Buying Opportunity • Jul 12
Now 20% undervalued Over the last 90 days, the stock is up 21%. The fair value is estimated to be CA$3.94, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 21% over the last 3 years. Meanwhile, the company has become profitable. Revenue is forecast to grow by 19% in 2 years. Earnings is forecast to grow by 178% in the next 2 years. Buying Opportunity • Jun 24
Now 21% undervalued Over the last 90 days, the stock is up 14%. The fair value is estimated to be CA$3.77, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 21% over the last 3 years. Meanwhile, the company has become profitable. Revenue is forecast to grow by 19% in 2 years. Earnings is forecast to grow by 178% in the next 2 years. Reported Earnings • May 12
Third quarter 2023 earnings: Revenues exceed analysts expectations while EPS lags behind Third quarter 2023 results: EPS: CA$0.004 (down from CA$0.015 in 3Q 2022). Revenue: CA$68.4m (up 32% from 3Q 2022). Net income: CA$364.0k (down 73% from 3Q 2022). Profit margin: 0.5% (down from 2.6% in 3Q 2022). Revenue exceeded analyst estimates by 7.7%. Earnings per share (EPS) missed analyst estimates by 80%. Revenue is forecast to grow 7.6% p.a. on average during the next 3 years, compared to a 13% growth forecast for the Machinery industry in Canada. Over the last 3 years on average, earnings per share has increased by 90% per year but the company’s share price has only increased by 40% per year, which means it is significantly lagging earnings growth. Major Estimate Revision • Feb 21
Consensus EPS estimates fall by 14%, revenue upgraded The consensus outlook for fiscal year 2023 has been updated. 2023 revenue forecast increased from CA$229.7m to CA$243.2m. EPS estimate fell from CA$0.047 to CA$0.04 per share. Net income forecast to grow 46% next year vs 46% growth forecast for Machinery industry in Canada. Consensus price target up from CA$3.41 to CA$3.59. Share price rose 3.7% to CA$2.82 over the past week. Ankündigung • Feb 16
H2O Innovation Inc. Appoints Mr. Leonard F. Graziano as Member of its Board of Directors H2O Innovation Inc. announced the appointment of Mr. Leonard F. Graziano as a member of its Board of Directors, effective on February 13, 2023. Mr. Graziano has been serving on H2O Innovation's Strategy, Innovation and Large Projects Committee as an external advisor for the last six years. From 2002 to 2011, Mr. Graziano held the position of President and CEO of Severn Trent Services Inc. (STS), which provides water and wastewater treatment and operating services to utilities, municipalities and commercial customers around the world. He has also served as a board member of STS and of the National Association of Water Companies. Prior to joining STS, Mr. Graziano served five (5) years as President of Chemineer Inc., a division of Robbins & Myers Inc., a leader in industrial mixing and agitation equipment and technology. Prior to this role, Mr. Graziano held various executive positions in the pump industry. Mr. Graziano holds an MBA from Temple University and a Bachelor’s degree in Industrial Engineering from Rutgers University, and has over 45 years of experience in the water treatment industry. Reported Earnings • Feb 14
Second quarter 2023 earnings: EPS in line with analyst expectations despite revenue beat Second quarter 2023 results: EPS: CA$0.007 (down from CA$0.009 in 2Q 2022). Revenue: CA$63.9m (up 52% from 2Q 2022). Net income: CA$620.0k (down 19% from 2Q 2022). Profit margin: 1.0% (down from 1.8% in 2Q 2022). Revenue is forecast to grow 8.7% p.a. on average during the next 3 years, compared to a 13% growth forecast for the Machinery industry in Canada. Over the last 3 years on average, earnings per share has increased by 98% per year but the company’s share price has only increased by 36% per year, which means it is significantly lagging earnings growth. Ankündigung • Feb 01
H2O Innovation Inc. to Report Q2, 2023 Results on Feb 14, 2023 H2O Innovation Inc. announced that they will report Q2, 2023 results at 8:00 AM, US Eastern Standard Time on Feb 14, 2023 Valuation Update With 7 Day Price Move • Dec 21
Investor sentiment improved over the past week After last week's 15% share price gain to CA$2.37, the stock trades at a forward P/E ratio of 41x. Average forward P/E is 20x in the Machinery industry in Canada. Total returns to shareholders of 132% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at CA$3.50 per share. Major Estimate Revision • Nov 17
Consensus forecasts updated The consensus outlook for 2023 has been updated. 2023 revenue forecast increased from CA$216.6m to CA$227.8m. EPS estimate fell from CA$0.08 to CA$0.05 per share. Net income forecast to grow 15% next year vs 42% growth forecast for Machinery industry in Canada. Consensus price target broadly unchanged at CA$3.34. Share price rose 3.8% to CA$2.17 over the past week. Reported Earnings • Nov 16
First quarter 2023 earnings released: EPS: CA$0 (vs CA$0.007 in 1Q 2022) First quarter 2023 results: EPS: CA$0 (down from CA$0.007 in 1Q 2022). Revenue: CA$56.1m (up 46% from 1Q 2022). Net income: CA$9.0k (down 99% from 1Q 2022). Profit margin: 0% (down from 1.6% in 1Q 2022). Revenue is forecast to grow 7.4% p.a. on average during the next 3 years, compared to a 14% growth forecast for the Machinery industry in Canada. Over the last 3 years on average, earnings per share has increased by 101% per year but the company’s share price has only increased by 27% per year, which means it is significantly lagging earnings growth. Reported Earnings • Nov 12
First quarter 2023 earnings released: EPS: CA$0 (vs CA$0.007 in 1Q 2022) First quarter 2023 results: EPS: CA$0 (down from CA$0.007 in 1Q 2022). Revenue: CA$56.1m (up 46% from 1Q 2022). Net income: CA$9.0k (down 99% from 1Q 2022). Profit margin: 0% (down from 1.6% in 1Q 2022). Revenue is forecast to grow 7.4% p.a. on average during the next 3 years, compared to a 15% growth forecast for the Machinery industry in Canada. Over the last 3 years on average, earnings per share has increased by 101% per year but the company’s share price has only increased by 27% per year, which means it is significantly lagging earnings growth. Ankündigung • Oct 28
H2O Innovation Inc. to Report Q1, 2023 Results on Nov 10, 2022 H2O Innovation Inc. announced that they will report Q1, 2023 results at 8:00 AM, Eastern Standard Time on Nov 10, 2022 Valuation Update With 7 Day Price Move • Oct 10
Investor sentiment improved over the past week After last week's 17% share price gain to CA$2.30, the stock trades at a forward P/E ratio of 30x. Average forward P/E is 15x in the Machinery industry in North America. Total returns to shareholders of 93% over the past three years. Major Estimate Revision • Oct 05
Consensus forecasts updated The consensus outlook for 2023 has been updated. 2023 revenue forecast increased from CA$196.1m to CA$215.8m. EPS estimate fell from CA$0.09 to CA$0.08. Net income forecast to grow 46% next year vs 22% growth forecast for Machinery industry in Canada. Consensus price target down from CA$3.50 to CA$3.39. Share price fell 2.3% to CA$2.11 over the past week. Reported Earnings • Sep 28
Full year 2022 earnings released: EPS: CA$0.058 (vs CA$0.039 in FY 2021) Full year 2022 results: EPS: CA$0.058 (up from CA$0.039 in FY 2021). Revenue: CA$184.4m (up 28% from FY 2021). Net income: CA$5.11m (up 64% from FY 2021). Profit margin: 2.8% (up from 2.2% in FY 2021). Revenue is forecast to grow 6.6% p.a. on average during the next 3 years, compared to a 16% growth forecast for the Machinery industry in Canada. Over the last 3 years on average, earnings per share has increased by 98% per year but the company’s share price has only increased by 22% per year, which means it is significantly lagging earnings growth. Ankündigung • Sep 27
H2O Innovation Inc., Annual General Meeting, Dec 06, 2022 H2O Innovation Inc., Annual General Meeting, Dec 06, 2022. Ankündigung • Sep 15
H2O Innovation Inc. to Report Q4, 2022 Results on Sep 28, 2022 H2O Innovation Inc. announced that they will report Q4, 2022 results at 8:00 AM, Eastern Daylight on Sep 28, 2022 Valuation Update With 7 Day Price Move • Jul 13
Investor sentiment improved over the past week After last week's 15% share price gain to CA$2.05, the stock trades at a forward P/E ratio of 28x. Average forward P/E is 16x in the Machinery industry in Canada. Total returns to shareholders of 71% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at CA$3.89 per share. Ankündigung • Jul 05
H2O Innovation Announces Change on its Board of Directors H2O Innovation Inc. announced the resignation of one of its directors, Mr. René Vachon, and the appointment of Mr. Bertrand Lauzon as Board member. For the last three years, Mr. René Vachon has served as director of the Corporation and sat on different committees of the Board of Directors. Mr. Bertrand Lauzon was appointed as a member of the Corporation's Board of Directors and audit committee on July 1, 2022. Mr. Lauzon currently holds the position of Executive Vice President of BFL Canada, which he joined in 2006 as Chief Financial Officer. As Executive Vice President, Mr. Lauzon advises management on complex financial transactions, merger and acquisition transactions, as well as tax matters. Mr. Lauzon is also a member of BFL Canada’s Board of Directors, audit committee and governance committee. Before joining BFL Canada, Mr. Lauzon was First Vice-President of Finance, Operations and Systems, as well as Chief Financial Officer for Desjardins Securities. Prior to that, he was First Vice-President of Finance and Information Technology, as well as Chief Financial Officer at the Caisse de dépôt et placement du Québec (CDPQ). Mr. Lauzon holds exceptional credentials in the financial sector, with more than 38 years of experience as a chartered professional accountant. Ankündigung • Jul 01
H2O Innovation Inc. (TSX:HEO) completed the acquisition of Business of Leader Evaporator, Inc. H2O Innovation Inc. (TSX:HEO) entered into a binding letter of intent to acquire Business of Leader Evaporator, Inc on April 12, 2022. The transaction will be financed using the H2O Innovation’s available cash and/or existing credit facilities. The transaction is subject to customary closing conditions and expected to close before July 1, 2022.
H2O Innovation Inc. (TSX:HEO) completed the acquisition of Business of Leader Evaporator, Inc on June 30, 2022. Major Estimate Revision • May 19
Consensus EPS estimates increase by 13% The consensus outlook for earnings per share (EPS) in 2022 has improved. 2022 revenue forecast increased from CA$168.6m to CA$178.4m. EPS estimate increased from CA$0.04 to CA$0.05 per share. Net income forecast to grow 167% next year vs 167% growth forecast for Machinery industry in Canada. Consensus price target of CA$3.54 unchanged from last update. Share price rose 5.7% to CA$2.24 over the past week. Reported Earnings • May 14
Third quarter 2022 earnings: EPS and revenues exceed analyst expectations Third quarter 2022 results: EPS: CA$0.015 (down from CA$0.026 in 3Q 2021). Revenue: CA$51.9m (up 33% from 3Q 2021). Net income: CA$1.33m (down 36% from 3Q 2021). Profit margin: 2.6% (down from 5.3% in 3Q 2021). The decrease in margin was driven by higher expenses. Revenue exceeded analyst estimates by 14%. Earnings per share (EPS) also surpassed analyst estimates by 25%. Over the next year, revenue is forecast to grow 14%, compared to a 144% growth forecast for the industry in Canada. Over the last 3 years on average, earnings per share has increased by 88% per year but the company’s share price has only increased by 27% per year, which means it is significantly lagging earnings growth. Ankündigung • Apr 13
H2O Innovation Inc. (TSX:HEO) entered into a binding letter of intent to acquire Business of Leader Evaporator, Inc. H2O Innovation Inc. (TSX:HEO) entered into a binding letter of intent to acquire Business of Leader Evaporator, Inc on April 12, 2022. The transaction will be financed using the H2O Innovation’s available cash and/or existing credit facilities. The transaction is subject to customary closing conditions and expected to close before July 1, 2022. Valuation Update With 7 Day Price Move • Mar 15
Investor sentiment improved over the past week After last week's 16% share price gain to CA$2.38, the stock trades at a forward P/E ratio of 41x. Average forward P/E is 20x in the Machinery industry in Canada. Total returns to shareholders of 167% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at CA$3.74 per share. Reported Earnings • Feb 15
Second quarter 2022 earnings: Revenues exceed analysts expectations while EPS lags behind Second quarter 2022 results: EPS: CA$0.009 (up from CA$0.003 in 2Q 2021). Revenue: CA$42.0m (up 20% from 2Q 2021). Net income: CA$762.0k (up 184% from 2Q 2021). Profit margin: 1.8% (up from 0.8% in 2Q 2021). Revenue exceeded analyst estimates by 8.1%. Earnings per share (EPS) missed analyst estimates by 10%. Over the next year, revenue is forecast to grow 14%, compared to a 101% growth forecast for the industry in Canada. Over the last 3 years on average, earnings per share has increased by 82% per year but the company’s share price has only increased by 44% per year, which means it is significantly lagging earnings growth. Major Estimate Revision • Feb 15
Consensus forecasts updated The consensus outlook for 2022 has been updated. 2022 EPS estimate fell from CA$0.06 to CA$0.04. Revenue forecast unchanged from CA$164.9m at last update. Net income forecast to grow 104% next year vs 94% growth forecast for Machinery industry in Canada. Consensus price target of CA$3.59 unchanged from last update. Share price rose 9.4% to CA$2.55 over the past week. Ankündigung • Feb 02
H2O Innovation Inc. to Report Q2, 2022 Results on Feb 14, 2022 H2O Innovation Inc. announced that they will report Q2, 2022 results at 8:00 AM, US Eastern Standard Time on Feb 14, 2022 Buying Opportunity • Jan 18
Now 21% undervalued Over the last 90 days, the stock is up 8.4%. The fair value is estimated to be CA$3.26, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 13% per annum over the last 3 years. The company has become profitable over the last year. Ankündigung • Dec 16
H2O Innovation Inc. (TSXV:HEO) acquired JCO, Inc. and Environmental Consultants, LLC. H2O Innovation Inc. (TSXV:HEO) acquired JCO, Inc. and Environmental Consultants, LLC on December 15, 2021. The purchase price for these acquisitions will be satisfied from cash on hand, the recently amended credit facility of $55 million and by the issuance of an aggregate of 1,107,733 H2O Innovation’s common shares, at a price of $2.375 per share. The transaction also includes a contingent consideration which is 10% of the purchase price and is payable twelve months after closing subject to achievement of certain revenue objectives by each of the Targets. The common shares issued are subject to a statutory resale restriction until April 15, 2022. JCO and EC are now part of H2O platform. The 120 employees of both JCO, Inc. and Environmental Consultants, LLC are becoming employees of H2O Innovation Inc. and will ensure the continuity and growth of the business in the Northeast region. For the twelve-month period ending on September 30, 2021, JCO and Environmental Consultants generated an aggregate of $13.5 million in revenues with, on a consolidated basis, net earnings of $1.1 million and an adjusted EBITDA of $2.6 million. Both transactions are expected to be immediately accretive to H2O Innovation’s net earnings and EBITDA.
H2O Innovation Inc. (TSXV:HEO) completed the acquisition of JCO, Inc. and Environmental Consultants, LLC on December 15, 2021. Reported Earnings • Nov 12
First quarter 2022 earnings released: EPS CA$0.007 (vs CA$0.013 in 1Q 2021) The company reported a soft first quarter result with weaker earnings and profit margins, although revenues improved. First quarter 2022 results: Revenue: CA$38.4m (up 9.7% from 1Q 2021). Net income: CA$618.0k (down 37% from 1Q 2021). Profit margin: 1.6% (down from 2.8% in 1Q 2021). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 71% per year but the company’s share price has only increased by 47% per year, which means it is significantly lagging earnings growth. Recent Insider Transactions Derivative • Oct 24
Independent Vice Chairman of the Board exercised options to buy CA$147k worth of stock. On the 19th of October, Richard Hoel exercised options to buy 62k shares at a strike price of around CA$1.40, costing a total of CA$87k. This transaction amounted to 3.3% of their direct individual holding at the time of the trade. Since December 2020, Richard has owned 1.86m shares directly. Company insiders have collectively sold CA$1.8m more than they bought, via options and on-market transactions in the last 12 months. Valuation Update With 7 Day Price Move • Oct 05
Investor sentiment deteriorated over the past week After last week's 15% share price decline to CA$2.29, the stock trades at a forward P/E ratio of 42x. Average forward P/E is 22x in the Machinery industry in North America. Total returns to shareholders of 118% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at CA$2.61 per share. Reported Earnings • Sep 29
Full year 2021 earnings released: EPS CA$0.039 (vs CA$0.061 loss in FY 2020) The company reported a strong full year result with improved earnings, revenues and profit margins. Full year 2021 results: Revenue: CA$144.3m (up 8.0% from FY 2020). Net income: CA$3.12m (up CA$7.35m from FY 2020). Profit margin: 2.2% (up from net loss in FY 2020). Over the last 3 years on average, earnings per share has increased by 61% per year but the company’s share price has only increased by 29% per year, which means it is significantly lagging earnings growth. Valuation Update With 7 Day Price Move • Aug 17
Investor sentiment improved over the past week After last week's 15% share price gain to CA$2.77, the stock trades at a forward P/E ratio of 44x. Average forward P/E is 23x in the Machinery industry in North America. Total returns to shareholders of 129% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at CA$2.44 per share. Reported Earnings • May 14
Third quarter 2021 earnings released: EPS CA$0.026 (vs CA$0.04 loss in 3Q 2020) The company reported a strong third quarter result with improved earnings, revenues and profit margins. Third quarter 2021 results: Revenue: CA$39.2m (up 8.6% from 3Q 2020). Net income: CA$2.06m (up CA$5.16m from 3Q 2020). Profit margin: 5.3% (up from net loss in 3Q 2020). The move to profitability was primarily driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 49% per year but the company’s share price has only increased by 29% per year, which means it is significantly lagging earnings growth. Reported Earnings • Feb 12
Second quarter 2021 earnings released: EPS CA$0.003 (vs CA$0.014 loss in 2Q 2020) The company reported a strong second quarter result with improved earnings, revenues and profit margins. Second quarter 2021 results: Revenue: CA$35.0m (up 4.9% from 2Q 2020). Net income: CA$268.0k (up CA$1.18m from 2Q 2020). Profit margin: 0.8% (up from net loss in 2Q 2020). Over the last 3 years on average, earnings per share has increased by 35% per year whereas the company’s share price has increased by 34% per year. Analyst Estimate Surprise Post Earnings • Feb 12
Revenue and earnings miss expectations Revenue missed analyst estimates by 2.8%. Earnings per share (EPS) also missed analyst estimates by 60%. Over the next year, revenue is forecast to grow 8.2%, compared to a 352% growth forecast for the Machinery industry in Canada. Ankündigung • Feb 02
H2O Innovation Inc. (TSXV:HEO) acquired the remaining 76% of Genesys Membrane Products, S.L. H2O Innovation Inc. (TSXV:HEO) acquired the remaining 76% of Genesys Membrane Products, S.L on February 1, 2021. The purchase price will be paid in cash over the next 3 years and will be based on 2x the EBITDA of GMP for each calendar year of 2020, 2021 and 2022, multiplied by 76%. At closing, the corporation paid out from its working capital an initial amount of CAD 2.4 million, which is subject to certain adjustments upon receipt of the 2020 audited financial statements. The earn-out due for 2021 and 2022 will be calculated and paid, using the same formula once the audited financial statements for each of those years will be completed. The valuation of GMP is based on 6x earnings before interest, taxes, depreciation, and amortization (“EBITDA”). The transaction was paid through the corporation’s existing working capital. For the year ending on December 31, 2020, GMP’s revenues were approximately CAD 7.75 million. The transaction includes the signing of employment and non-compete agreements with key employees. Juan Shang and Javier
Pool, majority owners and co-Chief Executive Officers of GMP, along with other employees will become part of the H2O family. The acquisition increased the corporation’s EBITDA on a proforma basis by more than 10% and is immediately accretive to corporation’s earning per share (EPS).
H2O Innovation Inc. (TSXV:HEO) completed the acquisition of the remaining 76% of Genesys Membrane Products, S.L for CAD on February 1, 2021. Ankündigung • Jan 29
H2O Innovation Inc. to Report Q2, 2021 Results on Feb 11, 2021 H2O Innovation Inc. announced that they will report Q2, 2021 results at 8:00 AM, US Eastern Standard Time on Feb 11, 2021 Is New 90 Day High Low • Jan 26
New 90-day high: CA$3.32 The company is up 76% from its price of CA$1.89 on 27 October 2020. The Canadian market is up 15% over the last 90 days, indicating the company outperformed over that time. However, it underperformed the Machinery industry, which is up 81% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is CA$1.97 per share. Price Target Changed • Jan 22
Price target raised to CA$3.07 Up from CA$2.69, the current price target is an average from 7 analysts. The new target price is close to the current share price of CA$2.99. As of last close, the stock is up 208% over the past year. Ankündigung • Jan 19
H2O Innovation Inc. Receives Engineering Contract on a Capital Equipment Project for the Largest Electric Vehicle Manufacturer in the US, as Well as Four New Municipal and Industrial Capital Equipment Projects H2O Innovation Inc. announced it was awarded the engineering contract on a capital equipment project for the largest electric vehicle manufacturer in the US, as well as four new municipal and industrial capital equipment projects. These new contracts, totaling $3.2 million, will bring the Corporation’s Water Technologies & Services (“WTS”) sales backlog to $37.1 million. The Corporation has secured the engineering contract to design two identical reverse osmosis (“RO”) trains, each rated at 2,200 m3/day, for an electric vehicle manufacturing plant located in Texas. Upon successful completion of the engineering work, a purchase order for construction and delivery of the equipment should be issued to the Corporation. The first project is for an upgrade of the 7,500 m3/day Granbury Wastewater South Plant, in Granbury, Texas. The existing conventional activated sludge plant will be converted to a membrane bioreactor (MBR) facility with biological phosphorus removal. The new equipment builds on the plant’s current infrastructure, reducing the capital cost, and the upgrade is designed using the Corporation’s innovative flexMBR™ universal membrane system, which reduces lifecycle cost. The next project awarded to H2O Innovation is for a redesign and replacement of a failing MBR system at a school in the State of Maryland. The Corporation has been selected to make the necessary repairs and improve the durability of the wastewater system using ceramic membranes. The third project, an exciting first for H2O Innovation, is the award of a demonstration pilot for its novel SILOTM technology at an industrial customer in the Midwest US. The SILOTM platform was developed in-house as a simplified approach to MBR treatment for smaller applications and decentralized treatment facilities where installation costs, ease of operation, and low maintenance are key differentiators. Finally, H2O Innovation has secured a contract in Southern California for the supply of two RO demonstration units at the Hyperion Water Reclamation facility for long-term testing and public outreach. Each unit will be capable of producing up to 134 m3/day treating secondary MBR filtrate. This project reinforces the Corporation’s presence and experience in the critical water reuse market. Is New 90 Day High Low • Jan 06
New 90-day high: CA$2.33 The company is up 40% from its price of CA$1.67 on 07 October 2020. The Canadian market is up 11% over the last 90 days, indicating the company outperformed over that time. However, it underperformed the Machinery industry, which is up 44% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is CA$1.91 per share. Ankündigung • Dec 18
H2O Innovation Inc Secures $3.3 Million Three Large FRP & Coupling Orders and Signs Two New Distribution Agreements H2O Innovation Inc. announced its business line Piedmont, a global leader in corrosion resistant equipment for desalination plants in the industrial and municipal markets, secured three large orders for fiber reinforced polyester cartridge filter housings and duplex stainless couplings, totalling $3.3 million. The team also signed two new distribution agreements in new geographies. Recent Insider Transactions • Dec 16
Independent Vice Chairman of the Board recently sold CA$1.9m worth of stock On the 11th of December, Richard Hoel sold around 918k shares on-market at roughly CA$2.10 per share. This was the largest sale by an insider in the last 3 months. This was Richard's only on-market trade for the last 12 months. Price Target Changed • Dec 12
Price target raised to CA$2.69 Up from CA$2.46, the current price target is an average from 7 analysts. The new target price is 27% above the current share price of CA$2.12. As of last close, the stock is up 106% over the past year. Ankündigung • Dec 10
H2O Innovation Inc. to Present Its First 3-Year Strategic Plan Aligning Its Long-Term Vision with Key Strategic Objectives H2O Innovation Inc. to present its first 3-year strategic plan aligning its long-term vision with key strategic objectives. These objectives and their progress over time will be regularly communicated to key stakeholders to ensure proper alignment at all levels within the framework of the 3-year strategic plan. The current Global Water market is estimated at $842 B for the year 2020. This market is expected to grow annually between 5 to 14% depending on the sub-market or geography. Fundamental drivers such as population growth, tightening regulations, water scarcity, and growing demand from agriculture and industries are just a few of the multiple factors influencing this expected growth. These market drivers would add pressure on existing infrastructure to become leaner and more efficient with their operations. To develop the 3-year strategic plan, the Corporation’s executive team, in collaboration with the business line managers, has identified specific sub-markets and sub-segments to determine a current addressable market for H2O Innovation in the range of $4.5 B. This addressable market is where the Corporation intends to continue its growth during the next three years, both organically and through mergers and acquisitions. The Corporation intends to build out its businesses in a way that will enhance cross-selling opportunities, maximize customer synergies and retention, and improve its operational efficiency. By the end of fiscal year 2023, the current goal is to expand H2O Innovation’s adjusted EBITDA margin above 11%. To reach this objective, focus will be put on improving the gross profit margin, reducing fix costs percentage over revenue, and completing acquisitions. In three years, it is expected to reach $175 to 250 M in revenues, depending on the number of acquisitions completed. The Corporation is expecting to reduce its cost of goods sold and improving operational excellence by taking the following measures: leaner business processes in the acquired companies, implementation of comprehensive business intelligence solutions, smart procurement, rebranding & merger of the O&M business pillar, as announced last week, and pro-active health & safety practices. The Corporation should reduce its fix costs percentage over revenues by leveraging its centralized corporate support services. New innovative products will be developed and taken to market through the Corporation’s large distribution network which will leverage the sales organisation and enable to increase the gross profit margin. The pipeline of acquisition targets is rich in opportunities and is diversified in size as well as company profile. The Corporation intends to complete between two to four acquisitions within the next 30 months. Based on its current situation and on financial forecasts, the Corporation has the ability and financial capacity to acquire complementary businesses. The intention is to do it without dilution for the shareholders, unless it is required to complete a significant transaction in size, and to remain disciplined in the multiple paid for these transactions. Most importantly, proper integration will be key to maximize sales and costs synergies. From H2O Innovation’s Mission and Vision statements, and 10 key strategic objectives come the new Playbook. The H2O Innovation Playbook centers around creating value, allowing the Corporation to compete enthusiastically for customers, talent, and shareholders. Is New 90 Day High Low • Dec 08
New 90-day high: CA$2.15 The company is up 92% from its price of CA$1.12 on 08 September 2020. The Canadian market is up 10.0% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Machinery industry, which is up 31% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is CA$1.62 per share. Is New 90 Day High Low • Nov 17
New 90-day high: CA$1.97 The company is up 84% from its price of CA$1.07 on 18 August 2020. The Canadian market is up 2.0% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Machinery industry, which is up 3.0% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is CA$1.63 per share. Price Target Changed • Nov 13
Price target raised to CA$2.46 Up from CA$2.24, the current price target is an average from 6 analysts. The new target price is 31% above the current share price of CA$1.87. As of last close, the stock is up 72% over the past year.