DH Corp .might win the race with Element Fleet Mgmt.

      A  blog done on Workathon on March 6 asked the question "who will win the competition between DH and Element Fleet Management"?Well DH just reported it's annual results on March 6.And it did pretty well.The results are listed below.
     Annual Results
 DH reports that it's performance was at the upper end of  gyuidance for 2016.Revenues increased 11.5% to $1.679 billion from $1.506 billion.Primarily due to a full year of operations for  it's GTBS  segment acquisition and growth in their Land IC segment.Adjusted EBITDA decreased 5% to $450 million from $475 million.However there was a consolidated net loss of $94 million or $.88 per share compared to a net loss of $68 million or $.63 per share;this was primarily due to an impairment of goodwill charge.On the other hand, net cash from operations  increased by 33% to $293 million  from $221 million.Debt was down to $1.9 billion from $2.1 billion.And in fact they repaid $31 million in the fourth quarter and $131 million since the acquisition of Fundtech.Total debt to EBITDA was 3.276x in December31,2016 compared to 3.451x in April30,2015(after acquiring Fundtech).In addition they reduced their dividend from $.32 to $.12 per share for a quarter.
     Strategic  Review
      There will be no guidance on the future direction until the process is complete.There are a number of options open but one is to seek financial guidance.Another option ( and one preferred by this blog) is to divest assets for which a capital gain is embedded.The proceeds would be used to reduce debt further;a good goal would be 3.00x EBITDA.In order to aid this goal DH will provide it's 2017 results in segments or subsidiaries with segment revenues and EBITDA. This will help to point out the weaker segments.They will provide the EBITDA outlook for 2018 also.                     

 Our Forecast

It is not likely that DH will accept a firesale price as the stock price has recovered from a low of $14 in November of 2016.However allowing a financial institution of some kind to take a small but substantial share is not out of the question.Should the price not be to DH's liking then the most likely step is to unload one of their older acquisitions that has some capital gain built in.In other words it is likely that they will have a small change in direction not a big one.DH may trade between $22 and $27 per share for most of 2017.Element Fleet Management is recovering from the split from ECN Capital and has made a major joint venture.This blog sees EFN moving up to the $15 to $17 level by mid-2017.                          use Workathon for business forecasts;use Workathon for business forecasts