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FRXI: Exploring Strategic Alternatives

FRXI: Exploring Strategic Alternatives

FRXI:探索戰略替代方案
Greenridge Global ·  2023/10/16 08:27  · 研報

Exploring Strategic Alternatives. On September 27, the Company announced its Board “formed a Special Committee to explore strategic alternatives to enhance value and to accelerate the utilization of FRX’s Nofia brand of fire retardants”.  The Special Committee includes CEO Marc Lebel, CFO Mark Lotz, Director Jim Cassina, Director Ekaterina Terskin, and Director Patrick Muezers (appointed to the Board in August).  Since the announcement, management has been unwilling to give any indication what the strategic alternatives being explored may be or what a timeline for this may be.  At this time, our best guess would be either a strategic financing and/or partnership in some form from a large current or potential customer, like LANXESS [XETR: LXS], which signed a MOU with FRX in late August.  Another potential option could be an attempt at a go-private management buyout, given the current market value being far below what we see as fair value, although we would be surprised if this would pass absent a substantial offer premium.  We see the Company being sold to a third party as the least likely alternative based on the current share price, the time and capital invested over the last roughly 15 years, and the rapid growth expected in the coming years.  In any event, we would expect the outcome from this process to be a net positive to FRX and its shareholders.    

探索戰略替代方案。 9月27日,該公司宣佈其董事會 “成立了一個特別委員會,負責探索戰略替代方案,以提高價值並加快FRX的Nofia品牌阻燃劑的利用”。特別委員會包括首席執行官馬克·勒貝爾、首席財務官馬克·洛茨、董事吉姆·卡西納、董事葉卡捷琳娜·特斯金和董事帕特里克·穆澤斯(8月被任命爲董事會成員)。自宣佈以來,管理層一直不願透露正在探索的戰略替代方案可能是什麼,或者可能的時間表是什麼。目前,我們最好的猜測是來自現有或潛在的大型客戶的戰略融資和/或某種形式的合作伙伴關係,例如朗盛 [XETR: LXS],該公司在8月下旬與FRX簽署了諒解備忘錄。另一種潛在的選擇可能是嘗試私有化的管理層收購,因爲當前的市值遠低於我們所認爲的公允價值,儘管如果在沒有可觀的報價溢價的情況下通過這種收購,我們會感到驚訝。根據當前的股價、過去大約15年的時間和資本投入以及未來幾年的預期快速增長,我們認爲將公司出售給第三方是最不可能的選擇。無論如何,我們預計這一過程的結果將對FRX及其股東產生淨利好。

Q2 Results Slightly Better Than Estimates.  FRX reported second quarter results with Revenue of $1.48 million, ahead of the year ago period and well above the last three quarters, due to increasing demand from new and existing customers.  Demand from new customers seeking to meet updated regulations and best standards continues to grow, with 41 new customer wins in 2023, through the end of August.  Reduced raw material costs enabled gross margin to increase to 31.8%.  Total operating expenses of $1.5 million were slightly less than expected.  EBITDA was -$820,000, while Net Loss was $1.18 million, or $0.01 per share, both better than our estimate for the quarter.

第二季度的業績略好於預期。由於新老客戶的需求增加,FRX公佈的第二季度業績收入爲148萬美元,高於去年同期,遠高於過去三個季度。尋求滿足最新法規和最佳標準的新客戶的需求持續增長,截至8月底,2023年有41家新客戶獲勝。原材料成本的降低使毛利率提高到31.8%。總運營支出爲150萬美元,略低於預期。息稅折舊攤銷前利潤爲-82萬美元,淨虧損爲118萬美元,合每股虧損0.01美元,均高於我們對本季度的預期。

Model Update. With Q2 results coming in slightly better than expected and new customer wins continuing to come through, we are confident FRX should continue to post Revenue growth and move towards profitability in the coming quarters, especially if it is able to sign a larger client.  With no major customer news announced, we are leaving our estimates unchanged.

模型更新。 隨着第二季度的業績略好於預期,並且繼續贏得新客戶,我們相信,FRX將在未來幾個季度繼續實現收入增長並走向盈利,尤其是在它能夠簽下更大的客戶的情況下。由於沒有公佈重大客戶消息,因此我們的估計保持不變。

Maintaining Rating & Target Price. The strategic alternatives announcement shortly after signing the MOU with LANXESS could be indicative of a big step for FRX going forward, whether it be a cash infusion, manufacturing, sales or a mix of these with LANXESS or another party.  In any case, the demand for Nofia continues to increase and we expect management will make the best decision for shareholders regarding any deals being made in the near future.  We are maintaining our Buy rating and C$0.75 target price on FRX Innovations.  Our target price is based on a mix of an EV/EBITDA multiple of roughly 10 times our 2025 EBITDA estimate of $6.8 million and a P/E multiple of 20 times our 2025 Diluted EPS estimate of $0.04, both discounted back one year at 20%.

維持評級和目標價格。 在與朗盛簽署諒解備忘錄後不久宣佈的戰略替代方案,這可能預示着FRX向前邁出了一大步,無論是現金注入、製造、銷售,還是與朗盛或其他方的混合。無論如何,對Nofia的需求持續增加,我們預計管理層將在不久的將來就任何交易爲股東做出最佳決定。我們維持FRX Innovations的買入評級和0.75加元的目標價。我們的目標價格是基於EV/EBITDA的倍數,大約是我們2025年息稅折舊攤銷前利潤估計值680萬美元的10倍,以及20倍的2025年攤薄後每股收益估計值0.04美元的市盈倍數,兩者均按20%折現了一年。

譯文內容由第三人軟體翻譯。


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