In addition, after using its $25 million credit facility, Li believes EMERGE will also consider extending its debt ceiling, as BattlBox and begin contributing to the company’s adjusted EBITDA. The company ended the quarter with $6 million in cash available after acquisitions to be completed in the upcoming quarter, with management expecting additional tuck-in acquisitions in existing verticals. The aquisitions of Being Battlbox Group and have closed.
Li attributed the EBITDA drop to a planned increase in corporate investment in preparation for acquisitions in the upcoming fourth quarter, though management noted that this should normalize for the remainder of the year. Meanwhile, after six consecutive positive quarters, EMERGE recorded negative adjusted EBITDA of approximately $500,000, a drop from narrowly breaking even last year, and slightly below the $300,000 loss projection from Raymond James. “JustGolfStuff did not see any major disruption from supply chain issues given its low dependency on inventory supply from China and inelastic demand from customers (volumes were up despite increased cost) - all good indications of stickiness in ECOM’s verticals,” Li said. TruLOCAL has also made investment in the B2C space, launching a ‘Corporate Gifts’ employee program for business partners, offering gourmet steak box and ‘Surf and Turf’ Box (wild-caught lobster).”ĮMERGE has also been able to adapt with changing markets, as the company has been able to direct traffic from, which has been down on account of golf courses being full, to JustGolfStuff.ca, which Li noted has been having a banner year. “Management noted exploring facility sharing between TruLOCAL and Carnivore with additional cross-selling opportunities between the two meat platforms. “ECOM is actively looking for revenue and cost synergies between portfolio companies,” Li said. The quarter was headlined by $6.1 million in revenue, representing a 171 per cent year-over-year increase, though it came in slightly below the Raymond James projection of $6.3 million.
Li’s latest analysis comes after the company reported its Q3 financial results, which Li reported to be in-line with projections. In a report to clients on Monday, Li maintained his “Outperform 2” rating and target price of $2.25/share for a projected return of 217 per cent.įounded in 2016 and headquartered in Toronto, EMERGE Commerce owns and operates online e-commerce marketplaces in Canada and the United States, with its main outlets being, truLOCAL.ca,, , JustGolfStuff.ca,, Carnivore Club and BeRightBack.ca. In-line third quarter numbers have left Raymond James analyst Steven Li holding steady on EMERGE Commerce ( EMERGE Commerce Stock Quote, Charts, News, Analysts, Financials TSXV:ECOM).
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