EPS of $0.09 missed expectations of $0.1567 and revenues of $211.63M beat expectations of $202.15M. Sales grew by 15.3% for the quarter, driven by organic growth of 13.5%, originating from all segments. Its gross profit margins expanded from 31.9% in the prior year to 34.0% in the recent quarter, and its Adjusted EBITDA margin also grew to 14.7% from 13.3% in the prior year. Management noted that typically its first quarter is slower due to the weather and construction starts, however, the diversification of its portfolio over the past few years has helped to mitigate this. Management expects revenue growth of 8% to 10% with an Adjusted EBITDA margin of ~16% for FY2023. Overall, despite the earnings miss, these were fairly strong results with a decent outlook.
It is difficult to say the probability of SIS being acquired, but it is fairly priced and has a strong business model. It is possible that a slightly larger company like ATS might see value in acquiring the company, and with a high ownership interest, we suspect this is the 'end game' for SIS.