Aptim’s bonds have been in a whipsaw pattern this week after the industrial services provider delivered mixed 3Q18 results, according to three sources familiar with the matter.

The borrower’s USD 515m 7.75% secured notes due 2025 traded at 82.875 today for 11.535% yield, up from a recent low of 82.5, but still down from 84 on 9 November before earnings, according to MarketAxess.

The company booked USD 326m in 3Q revenue, down 23% year-over-year from USD 423.7m in the prior-year period, and down 20% sequentially from USD 406m at 2Q, driven by roll-off seasonal work, the sources said. On an LTM basis, Aptim reported adjusted EBITDA of USD 87m, up 109% year-over-year from the corresponding period, sources said. Based on USD 515m of total debt, leverage edged up to 5.9x from 5.45x last quarter.

Even though the company had USD 58.3m of cost savings and synergies over the LTM period along with USD 26m of risks announced in October, sources estimated that Aptim hit its cap on addbacks during 2Q, which pressured 3Q EBITDA to around breakeven, sources said.

“They’re going to have revenue and earnings weakness for a little bit longer, at least through end of 4Q because they lost old contracts last year that rolled off,” one of the sources said.

On the other hand, the company continued to book new orders in the third quarter, the sources noted. Although lower than last quarter’s USD 930m in new contracts, Aptim received USD 535m of new awards, beating its usual average of USD 300m – USD 375m.

“I’m sure it’s going to be lumpy, but if they can get a reasonable amount of new orders [each quarter], they’re going to lap the bad news of rolling off the two big contracts late last year,” the second source said.

On Wednesday’s earnings call, investors were mainly curious as to how the company’s revenue from backlog–which totals USD 2.8bn– hasn’t translated to revenue growth. But disclosure on that front left some investors wanting more insight into the disconnect, the first source said.

Liquidity as of 30 September stood at USD 201m, with USD 161.5m of cash on hand, USD 86.6m of availability under its ABL facility due 2022 and USD 47.1m in letters of credit, two of the sources said.

Aptim did not respond to a request for comment.

2018 Debtwire