Earlier today, Guestlogix announced an agreement to merchandise Las Vegas events onboard participating airlines flying to Las Vegas. Guestlogix now sells Disney, CityPass, Broadway, and Las Vegas event tickets inflight with participating airlines. This announcement shows continued progress, and should be seen as a positive for the stock, which started moving upwards again yesterday.
Here is the press release
Showing posts with label retail systems. Show all posts
Showing posts with label retail systems. Show all posts
4/23/09
Guestlogix (GXI.V) Reports Strong Q1: Bullish Outlook
GXI reported Q1 today with revenue of $4.0 million, up 185% over Q1 2008 revenue of $1.4 million, with EBITDA of $0.8 million up from $0.1 million for Q1 2008. Total passenger trips under contract was reported at 824 million with 456 million deployed. Contracted passenger trips increased 17.1% sequentially from Q4 2008, and deployed passengers increased 15.4% over Q4 2008. Deployment is expected to accelerate over Q2 and Q3 as United, Continental, Saudi Airlines, and the undisclosed European carrier are brought online. Currently, the Company has 24 paying customers. Investors should consider Q1 results to be positive.
During the conference call, the Company disclosed that the entire $4.0 million in sales recorded during the quarter was recurring. The EBITDA margin was 21% and the Company disclosed that EBITDA margin is expected to increase to closer to 30% by fiscal year end. The Company disclosed that it expected monthly recurring revenue to increase to $2.0 million by year end, inferring that quarterly EBITDA should be in the $1.8 million range. If the Company is able to successfully conclude its ongoing litigation situation with Abanco (from Chicago), EBITDA would be positively impacted by approximately $0.25 million per quarter.
Please see my post on April 15th. The story remains fundamentally intact with possible acceleration related to future deployments, and roll-outs and adoption of merchandising programs.
The seven analysts are likely to find Q1 results and the general outlook to be positive. The Company is guiding EBITDA and sales generally higher than the mean estimate by analysts. Conservative analysts are likely to adjust forecasts upward. Bullish analysts are likely to remain bullish.
As a result, investors should see two trends occur. First, the variance among analysts is likely to tighten as some that were predicting lower annualized EBITDA and net income losses for the year are more likely to increase forecasts. This would infer that the mean target could be upgraded to a consensus target. Secondly, the mean forecasted target of $1.26 (in previous post) may increase by a few cents and become more of a consensus.
With tighter variances in forecasts by analysts, and possibly a higher consensus, investors may be more comfortable with the general direction of forecasts, and may be more inclined to buy the stock. Even with its remarkable run to todays price at $0.71 from $0.30 at the beginning of April, investors may take comfort that there is more upside in the stock.
To re-iterate: Guestlogix is positioned as the dominant platform for in-flight retailing in the North American market, and is the self-proclaimed de-facto standard. Over time, GXI could become the primary gateway to in-flight retailing for merchandisers in North America. This is a good spot to be for investors.
During the conference call, the Company disclosed that the entire $4.0 million in sales recorded during the quarter was recurring. The EBITDA margin was 21% and the Company disclosed that EBITDA margin is expected to increase to closer to 30% by fiscal year end. The Company disclosed that it expected monthly recurring revenue to increase to $2.0 million by year end, inferring that quarterly EBITDA should be in the $1.8 million range. If the Company is able to successfully conclude its ongoing litigation situation with Abanco (from Chicago), EBITDA would be positively impacted by approximately $0.25 million per quarter.
Please see my post on April 15th. The story remains fundamentally intact with possible acceleration related to future deployments, and roll-outs and adoption of merchandising programs.
The seven analysts are likely to find Q1 results and the general outlook to be positive. The Company is guiding EBITDA and sales generally higher than the mean estimate by analysts. Conservative analysts are likely to adjust forecasts upward. Bullish analysts are likely to remain bullish.
As a result, investors should see two trends occur. First, the variance among analysts is likely to tighten as some that were predicting lower annualized EBITDA and net income losses for the year are more likely to increase forecasts. This would infer that the mean target could be upgraded to a consensus target. Secondly, the mean forecasted target of $1.26 (in previous post) may increase by a few cents and become more of a consensus.
With tighter variances in forecasts by analysts, and possibly a higher consensus, investors may be more comfortable with the general direction of forecasts, and may be more inclined to buy the stock. Even with its remarkable run to todays price at $0.71 from $0.30 at the beginning of April, investors may take comfort that there is more upside in the stock.
To re-iterate: Guestlogix is positioned as the dominant platform for in-flight retailing in the North American market, and is the self-proclaimed de-facto standard. Over time, GXI could become the primary gateway to in-flight retailing for merchandisers in North America. This is a good spot to be for investors.
4/15/09
Guestlogix (GXI.V) continues to make progress
Earlier today, Guestlogix announced a contract with KLM, representing 39 million passenger trips in Europe. It is part of the Air France/KLM group.
This is the most recent of a string of announcements that includes a contract with Continental Airlines in the US, a new in-flight ticketing agreement with Heathrow Express, along with an extension of its In-Flight Box Office solution to include a major theme park operator. Although the Company has not disclosed the operator, there is a possibility that it may be Disney (DIS).
After trading as low as $0.30 as late as April 6, 2009, the shareprice has shot to $0.50 over the past week. With seven analysts covering the story, investors may be taking notice of the progress. As the Company continues to rollout its contracted backlog, quarterly revenue should continue to be lumpy. Sales and earnings were below expectations for Q4, 2008 because a couple of expected roll-outs slipped into Q1, 2009. When the Company reports Q1, 2009, the slippage from Q4 may be reflected in good performance for the quarter. Quarterly performance should continue to show volatility throughout 2009 as the Company continues to deploy major airlines. Once major rollouts are completed, revenue should be easier to forecast because most revenue (starting in FY 2010) should be recurring.
With respect to the full-year, the variance among analyst forecasts is high for 2009. However, the mean forecast for sales appears to indicate more than a doubling of sales over 2008 to around $19.5 million (adjusted). EBITDA forecasts infer a mean of approximately $5.8 million, with similar high variance in estimates. With the current shareprice at $0.50, the FYE mean EV/EBITDA multiple calculates to approximately 3.8x, which is 47% below the current of the mean for the Canadian technology sector. For a high growth Company with a near regional monopoly in North America, this multiple may seem low to some investors.
Based on its current trajectory, the Company may be generating cash and net income by H2 of FY 2009. The amount of free cashflow generated would depend upon how much is re-invested by Management to extend its retail offerings, and expand its European footprint both in airlines and rail. Investors should expect Management to continue to add retail and service offerings in order to position itself as a defacto on-board retailing platform for the airline industry, starting with North America. Incredible leverage can be gained by becoming a primary gateway to airline passengers for retailers, and the primary way to do that is to deliver more retail services through the platform.
Guestlogix has willing partners among airlines because an airplane is a closed system. By controlling access to retail services through the GXI gateway, airlines should benefit from new, previously unattainable revenue streams related to entertainment, retailing, and destination services. An analogous relationship would be between mobile app stores and mobile carriers. The app stores are the gateway for developers, and the mobile carrier networks are the closed system. All parties benefit as long as the offerings are perceived as valuable by consumers.
Investors may be reticent to invest in a stock closely related to the airline industry. There is a pervasive investor fear of bankruptcy associated GXI's client base. However, most of the major American carriers have restructured through bankruptcy in the past and have maintained and even expanded operations during restructuring periods. As a result, the probability that GXI's large global carriers will cease to operate any time soon are low. Notwithstanding, GXI owns all components of its network, which means that it can reallocate assets to other deploying clients if an airline shuts down. The Company has already done this in the past.
The lowest analyst target is nearly a double from the current price and the mean is $1.26, which suggests that there is potential strong upside to the stock price according to analysts. Although there may be still be a couple of minor executional stumbles as the Company scales, Management continues to make significant progress in a tough market. Guestlogix could ultimately become to airline carriers what mobile app stores are to mobile carriers.
I do not own shares of GXI, DIS, or any airline.
This is the most recent of a string of announcements that includes a contract with Continental Airlines in the US, a new in-flight ticketing agreement with Heathrow Express, along with an extension of its In-Flight Box Office solution to include a major theme park operator. Although the Company has not disclosed the operator, there is a possibility that it may be Disney (DIS).
After trading as low as $0.30 as late as April 6, 2009, the shareprice has shot to $0.50 over the past week. With seven analysts covering the story, investors may be taking notice of the progress. As the Company continues to rollout its contracted backlog, quarterly revenue should continue to be lumpy. Sales and earnings were below expectations for Q4, 2008 because a couple of expected roll-outs slipped into Q1, 2009. When the Company reports Q1, 2009, the slippage from Q4 may be reflected in good performance for the quarter. Quarterly performance should continue to show volatility throughout 2009 as the Company continues to deploy major airlines. Once major rollouts are completed, revenue should be easier to forecast because most revenue (starting in FY 2010) should be recurring.
With respect to the full-year, the variance among analyst forecasts is high for 2009. However, the mean forecast for sales appears to indicate more than a doubling of sales over 2008 to around $19.5 million (adjusted). EBITDA forecasts infer a mean of approximately $5.8 million, with similar high variance in estimates. With the current shareprice at $0.50, the FYE mean EV/EBITDA multiple calculates to approximately 3.8x, which is 47% below the current of the mean for the Canadian technology sector. For a high growth Company with a near regional monopoly in North America, this multiple may seem low to some investors.
Based on its current trajectory, the Company may be generating cash and net income by H2 of FY 2009. The amount of free cashflow generated would depend upon how much is re-invested by Management to extend its retail offerings, and expand its European footprint both in airlines and rail. Investors should expect Management to continue to add retail and service offerings in order to position itself as a defacto on-board retailing platform for the airline industry, starting with North America. Incredible leverage can be gained by becoming a primary gateway to airline passengers for retailers, and the primary way to do that is to deliver more retail services through the platform.
Guestlogix has willing partners among airlines because an airplane is a closed system. By controlling access to retail services through the GXI gateway, airlines should benefit from new, previously unattainable revenue streams related to entertainment, retailing, and destination services. An analogous relationship would be between mobile app stores and mobile carriers. The app stores are the gateway for developers, and the mobile carrier networks are the closed system. All parties benefit as long as the offerings are perceived as valuable by consumers.
Investors may be reticent to invest in a stock closely related to the airline industry. There is a pervasive investor fear of bankruptcy associated GXI's client base. However, most of the major American carriers have restructured through bankruptcy in the past and have maintained and even expanded operations during restructuring periods. As a result, the probability that GXI's large global carriers will cease to operate any time soon are low. Notwithstanding, GXI owns all components of its network, which means that it can reallocate assets to other deploying clients if an airline shuts down. The Company has already done this in the past.
The lowest analyst target is nearly a double from the current price and the mean is $1.26, which suggests that there is potential strong upside to the stock price according to analysts. Although there may be still be a couple of minor executional stumbles as the Company scales, Management continues to make significant progress in a tough market. Guestlogix could ultimately become to airline carriers what mobile app stores are to mobile carriers.
I do not own shares of GXI, DIS, or any airline.
2/12/09
More newsflow from GXI...and implications.
Yesterday GXI announced its second rail deal and first one in North America with the Atlantic City Express Service (ACES). ACES is an express rail service offered by Ceasars Entertainment and Borgato that runs from Penn Stations in New York and Newark to Atlantic City and is operated by New Jersey Transit. Like the deal in the UK, it is small, but it is the catalyst for a couple of key developments that may have longer reaching positive impact on future performance:
1. Transactions are completed with real-time authorization for the first time. Due to current communications restrictions, all airline deployments to date have been deployed as store-and-forward transactions, executed upon landing. As a terrestial service, GXI was able to develop real-time solutions. It has been deployed in poroduction for a few weeks already, so it works. As real-time inflight communications links emerge, work with the rail providers should make it fairly straightforward to move to real-time inflight authorization. With real-time authorization, transaction values could be increased substantially. "Sir, would that be coffee, tea, or a BMW?" (just kidding...kinda)
2. As a result of this deal, GXI now has a partnership with another significant caterer/logistics manager beyond its highly successful relationship with LSG SkyChefs. Compass Group is C$3.4 billion equivalent hospitality operation that provides food and logistics services to ACES. With its extensive hospitality and resort catering services, there could be future alignment for more destination services to be sold onboard.
With its flow of announcements, GXI continues to demonstrate progress for investors. Based on my current forecasts, the operating break-even point is likely to be somewhere in the $1.6 to $1.7 million monthly runrate. On January 22nd, the company provided guidance that it should be exiting Q1, 2009 with a run-rate of approximately $1.5 million. With over 300 million passenger trip in its disclosed backlog, investors could infer that starting sometime in Q2, the Company may hit its breakeven inflection point. Deployment delays could create some variance risk to breakeven forecasts. Deployment delays during Q4 2008 have already pushed back breakeven by more than a quarter. With $5.6 million in cash and cash equivalents, the Company has a lot cushion. The most important takeaway is that the Company should emerge from this recession as dominant wordwide player in onboard retailing services where it is could be exposed to over 1 billion captured consumers...err...travellers annually. How many other Canadian stocks sport that type of profile, let alone one with a market cap below $30 million.
I do not own shares of GXI.
1. Transactions are completed with real-time authorization for the first time. Due to current communications restrictions, all airline deployments to date have been deployed as store-and-forward transactions, executed upon landing. As a terrestial service, GXI was able to develop real-time solutions. It has been deployed in poroduction for a few weeks already, so it works. As real-time inflight communications links emerge, work with the rail providers should make it fairly straightforward to move to real-time inflight authorization. With real-time authorization, transaction values could be increased substantially. "Sir, would that be coffee, tea, or a BMW?" (just kidding...kinda)
2. As a result of this deal, GXI now has a partnership with another significant caterer/logistics manager beyond its highly successful relationship with LSG SkyChefs. Compass Group is C$3.4 billion equivalent hospitality operation that provides food and logistics services to ACES. With its extensive hospitality and resort catering services, there could be future alignment for more destination services to be sold onboard.
With its flow of announcements, GXI continues to demonstrate progress for investors. Based on my current forecasts, the operating break-even point is likely to be somewhere in the $1.6 to $1.7 million monthly runrate. On January 22nd, the company provided guidance that it should be exiting Q1, 2009 with a run-rate of approximately $1.5 million. With over 300 million passenger trip in its disclosed backlog, investors could infer that starting sometime in Q2, the Company may hit its breakeven inflection point. Deployment delays could create some variance risk to breakeven forecasts. Deployment delays during Q4 2008 have already pushed back breakeven by more than a quarter. With $5.6 million in cash and cash equivalents, the Company has a lot cushion. The most important takeaway is that the Company should emerge from this recession as dominant wordwide player in onboard retailing services where it is could be exposed to over 1 billion captured consumers...err...travellers annually. How many other Canadian stocks sport that type of profile, let alone one with a market cap below $30 million.
I do not own shares of GXI.
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