Revised 2010/2011 projections:
Today with the ER and CC for 4Q09 and FY2009, Company gave guidance for FY2010: revenue of min 220M and Net Income of min 12M. Net margins were said to be 7-8% for the recycling business and 4-5% for the distribution business. Fully diluted OS for the year is expected to be "a tad below 14M", so let say OS= 13.9M. I worked the numbers and came up with some revised range of eps to be expected for 2010 and 2011 (excluding addition of a second recycling plant or any expansion/dilution for now).
a) 2010: I think the minimum rev of 220M can be construed as the sum of 120M from recycling and 100M from distribution. If we take the lower net margin guidance for each component, we get approximately the min net income of 12M :
120M x 7% = 8.4M
100M x 4% = 4.0M, Total = 12.4M, min 2010 eps= 12.4/13.9= $0.89
If we take the higher net margin of each component, we get for the same scenario of min rev guidance net incomes of:
120M x 8% = 9.6M
100M x 5% = 5.0M, Total 14.6M NI, eps = 14.6/13.9= $1.05
Assuming for the higher end of the year a total revenue of 260M (say they get additional contracts of 60M totaling 160M for the recycling plant) and taking the higher Net Margin of each business:
160M x 8% = 12.8M
100M x 5% = 5.0M, Total NI= 17.8M, eps= 17.8/13.9= $1.28
so I see a more realistic eps range of 0.89 - 1.28 for 2010.
b) 2011: just for the heck of it I am going to extend this analysis to determine a high end eps for 2011 by assuming the recycling plant will be at almost 100% capacity (=$400M) in 2011 and same rev from the distribution business of 100M (to be conservative) and using a fully diluted OS of 14.8M as per my original model:
total 2011 rev = 480M
recycling 380M x 8% = 30.4M
distr. 100M x 5% = 5M, Total NI= 35.4M, 2011 eps = 35.4/14.8= $2.39
PS: although these 2010 and 2011 estimates are clearly subject to variations, compared to the just reported 2009 eps of 0.51, they do show pretty impressive yoy gains of 100%.
recycling 380M x 8% =
