ATC - Very nice looking growth play here totally under radar - 6.6m O/S and 3.8m float. Just reported 11c eps for Q ending December and given the weather so far this year and new product growth, could see similar numbers next q as well. It has traditionally been a seasonally based company slacking off in the summer, but they have been expanding to reduce this problem (golf cart accessories, motorcycles & mowers for example) and have great margins while running at max capacity. See clip below:
Looking ahead to the next three quarters of fiscal 2008 we project strong overall growth in revenues as new products, new markets, re- establishing our dominance in the markets that we already serve, and effective marketing initiatives continue to be the focus of management and the entire Company. With new opportunities unfolding in the golf car OEM utility vehicles and golf cars, the lawn and garden industry, the UTV, or Side-by-Side, market, our contract manufacturing segment, and even our mainstay ATV market, management projects double-digit growth for revenues. The company anticipates gross profits will remain steady in the 35% to 40% of revenue range as profitability is maintained through pricing adjustments and production costs and synergies are maintained or improved upon. We project selling, general and administrative expenses during the remainder of fiscal 2008 to be 20-25% of total revenue as we continue our focus on cost reduction initiatives, launching new products and maximizing the efficiencies the recently implemented new accounting and manufacturing software provides us, all while maintaining a consistent level of administrative support.
With their best Q ever and trends for 2008, I could see them exceeding 2004 earnings of 0.34c when the price traded between $4-6. I would anticipate given the above statement, they could see close to $18-20m in revenue (they did 20.7 in 2004), which would translate to 7-8m gross profit, 2.5-4m operating income, 1.6m to 2.6m net (up to 0.40 eps)...currently trading forward PE of 5, where industry average is 17 (taking out the high and low PE of the sector).
Pretty much unknown, but fundamentally sound looking forward.
