Lite Access (LTE) Lite Access Technologies (LTE.V / LTCCF:PINK) announced fiscal Q1 results just this week. They had already pre-announced at the end of January, so no big surprises here. LTE, you’ll recall, leverages innovative fiber installation technology to lay fiber-optic cable cheaper and faster than conventional methods. Here were the highlights: - Q1 2019 revenue up 160% to $6.8 million, compared to $2.6 million for Q1 2018
- Gross margins of 31% compared to 8.7% in Q1 2018
- EBITDA of approximately $747,000 compared to ($483,237) in the year ago period;
These strong results helped answer questions that have plagued the stock for years now: When will big contracts translate into actual revenue? What is the sustainable margin potential of the business? Can LTE turn profitable? We got a yes to all these questions with this one release. So why didn’t the market react? Our guess is it wants to see another quarter to confirm this wasn’t an outlier. And we know Gigaclear, who accounts for nearly 50% of LTE’s revenues, has had organizational issues which has delayed LTE’s ability to receive new work. So while Q1 had the benefit at operating near full ramp, we expect Q2 will see headwinds. The market has made it clear LTE must become more than a one contract company. We know this is a top priority for management, and will be watching closely for news they’ve closed a deal a deal as big – if not bigger – than the Gigaclear contract.
Viemed (VMD.TO) Viemed (VMD.TO / VIEMF:PINK) announced full year results this week as well. VMD, you’ll recall, provides in-home respiratory equipment (ventilators) and services to patients with COPD. These patients are end-of-life, and VMD’s services help them live more comfortably – and longer. Viemed delivered 2018 revenues of $65.3M and EBITDA of $17.2M. That translates to revenue growth of 39% year-over-year and EBITDA growth of 43%. It’s classic organic growth plus operating leverage – just what we like to see. And what the market wants to see as well – shares are up ~15% since the news. We continue to hold as this team executes quarter-after-quarter.
Pioneering Technology (PTE.V) Pioneering Technology (PTE.V / PTEFF:PINK) released their annual results last month. It was the conclusion of one of the worst years we’ve seen a company we own deliver. FY revenue closed at $4,800,000, down 54% from $10,300,000 last year. The company lost $1.6 million in Q4 and $3.3 million for the full year. Worse yet, Q4 revenue ($781,000) was the lowest revenue total of the year – the downward trends continues and loss continue to mount. Could an end be in sight? Pioneering did announce the termination of 3 executives that were caught in a scheme to steal the company’s customers. Management believes this was a major cause of 2018’s poor performance. But whether these actions will prove the remedy they needed or just another distraction is too early to tell. This remains a tough position to play. Company performance has been abysmal but with shares trading around net cash, it may be too early to sell. Make no mistake about it… we royally screwed this one up. We’re working on a case study and management interview to document what went wrong and how we can avoid a painful situation like this in the future. Stay tuned. We’ll continue to watch for either a rebound in financial performance or an opportunity to exit our position at acceptable prices.
Wrap up That’s it for today. Over the next month, we are expecting results from other key positions – AEP, IPA and URL to name a few. We’ll be back for the play-by-play once those numbers are released. To your wealth, Paul & Brandon Disclosure: Paul, Brandon, and Keith are long HTL.V, CTZ.V, LTE.V, VGL.V, VMD.TO, and PTE.V | 
