APTIM officials shared strategic planning updates and expectations for fiscal year 2019 with certain investors this week on a series of non-deal roadshow meetings, according to five sources familiar with the matter.
The industrial services company projects revenue will grow in the single digits to roughly USD 1.5bn in 2019, two of the sources said. For book-to-bill, management said its expects 1.2x or more in 2019, compared to 1.4x in 2018. APTIM executives also said they expect to book a USD 90m working-capital gain in 4Q19 from the US Virgin Islands, which would help bring liquidity to USD 227m from USD 137m at the end of 1Q19, four of the sources said.
Management’s previous bottom line guidance for this year put EBITDA in a USD 50m-USD 60m range for fiscal 2019, as reported. But sources have had difficulty giving the company full credit for the addbacks, calculating roughly USD 40m-50m of EBITDA. Based on USD 515m of total debt and USD 50m-USD 60m of EBITDA, the company would be 8.6x-10.3x levered. Accounting for source calculations of EBITDA, leverage would shift to 10.3x-12.9x.
On the roadshows, company officials noted that over the next two years they plan to pursue M&A options as a means to accelerating value creation in higher margin services, two of the sources said.
The company’s USD 515m 7.75% secured notes due 2025 have trended lower since the last day of the meetings on 19 June, trading today at 78.75 to yield 12.968% from trades at 80.5 on 19 June, according to MarketAxess.
APTIM was created as a standalone company in mid-2017 when Veritas acquired Chicago Bridge & Iron’s Capital Services business, as CB&I sold assets to deal with near-term maturities and covenant compliance.
A representative for APTIM declined to comment.