KeyStone Initiates Coverage On CEMATRIX With A SPEC BUY

Keystone Financial has been following CEMATRIX closely for some time. Based on financial results from a stellar 2015, analyst’s Ryan Irvine and Aaron Dunn believe the inflection point has come and it was time to introduce CEMATRIX to its audience of investors.

We quote from the report, “CEMATRIX’s 2015 was a record for the company both in terms of revenues and profitability. The company earned $0.046 per share and with its current trading price in the $0.37 range, its trailing PE is a multiple of around 8. Given the growth the company is forecasting in terms of a potential revenue bump to the $25 million range, the stock would appear cheap. Having said this, the revenue growth will not come without near-term costs and the forecasts are not without risk.

The initial research report recommends that its readers should acquire a starting position in CEMATRIX at current prices  with the intention of filling a full position over the course of the next 3-12 months.

CEMATRIX continues to focus its sales efforts in the ever growing infrastructure market and KeyStone believes that if success in this market continues, then 2017 sets up as a “breakthrough” year.

To read the full report, please click here.

Alaska Should Be Talking To CEMATRIX About Massive Highway Problems

A recent Bloomberg article quickly caught our attention as its title, Climate Change Is Hell on Alaska’s Formerly Frozen Highways”, addresses a huge issue that CEMATRIX solved for the City of Yellowknife in 2004, albeit on a smaller scale.

Author Greg Quinn wrote in detail about permafrost and the devastating effects it has on the lengthy 2,232 kilometre Alaskan Highway.  The article grabbed extensive press coverage including throughout Canada via the Financial Post. The article brought to mind a 2004 project where CEMATRIX’s cellular concrete, proprietary formulations and processes solved a regular and expensive headache along Yellowknife’s main thoroughfare, Franklin Avenue.  According to management,  the road frequently looked like a rollercoaster as permafrost thawed under the heat-trapping dark road surface.  

While it may sound improbable, the road bed would experience up to one metre of localized settlement as spring thaw hit. Enter CEMATRIX with cellular concrete, which acts as a floating, insulating base between the asphalt and the ground below. When re-constructed in 2004, areas with up to three metres of asphalt were removed and replaced with gravel,  prior to cellular concrete placement.

In speaking with company management, local Yellowknife engineers continue to report the CVX solution was THE answer and that minimal road repairs have been needed over the12 years since cellular concrete was used.  Its success scored CEMATRIX another contract win for a second Yellowknife project, McDonald Drive in 2010.

In Quinn’s article, he mentions that one section of the Alaska Highway that runs through the Yukon requires annual repairs of $30,000 per kilometre, that is seven times the cost of regular highway repairs.  The piece also refers to a quote from Fabrice Calmels, a researcher at Yukon College that states “It’s like taking five stories out of a 10-storey building” as he describes one critical section of the highway near Whitehorse.  Mr. Calmels said one solution is to keep the heat away by adding layers of insulation such as foam.

This application is only one of many uses for cellular concrete.  CEMATRIX has been working with Engineers across North America educating them on its product’s benefits and the extensive cost savings over other insulating products like Styrofoam, which is now under scrutiny for its environmental impact while being hidden from view.

Those in charge of Alaska’s highways only need to walk Franklin Road in Yellowknife to realize that the answer to their dilemma may be right under their feet.  

Recently CEMATRIX announced that it has formally partnered with the world’s largest cement company, LafargeHolcim, to co-develop the cellular concrete market.  Every time CEMATRIX makes a sale, it benefits LafargeHolcim as it is a sale that the cement giant would not have had if not for CEMATRIX and its solution. CEMATRIX has grown its annual business to over $15 million with a sales force consisting of three people. LafargeHolcim has a sales team many times larger than CEMATRIX, just in Canada.

This is all food for thought for investors.

CEMATRIX Sends A Message About Future Expectations Following News of A Record Q2

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CEMATRIX President and CEO Jeff Kendrick summed up today’s news of a record first half 2016 and Q2 in his quote:

“Our sales pipeline for projects scheduled for 2016 and 2017 are at the highest level in our history, excluding any potential additional sales expected to be generated from the recent Joint Marketing Agreement with Lafarge. We are taking the necessary steps to prepare the Company for this significant sales growth by building the additional required equipment, adding operational staff to be hired and trained, increasing product testing to facilitate marketing efforts and implementing the internal systems that will allow our staff to manage larger projects more efficiently.”

Projects on which CEMATRIX has been asked to submit bids now total $126 million with 89% of that total related to infrastructure.

Although CEMATRIX has spent years diversifying its business to round out the seasonality, it does somewhat mirror the construction season. The first half of the year is traditionally much slower than the second half.  CEMATRIX increased sales 19% to $5.9 million in comparison to the same period in 2015.  

Gross margin on sales was $1.2 million with reported positive EBITDA of $294,288. Management stated that increased labour costs for hiring additional staff in preparation of expected sales growth through the balance of 2016 and in 2017 brought margins down in H1 but expect them to improve as increased sales volume levels cover fixed costs.

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To view full news release, please click here.

Shares Outstanding: 34,475,994
Options: 3,425,000
Fully Diluted: 37,990,994

CEMATRIX Formally Joins Forces With Global Giant Lafarge – Market Responds Positively

In spite of globally weak markets, news on the CEMATRIX – Lafarge agreement has been well received with the stock climbing 20% from Friday’s $0.39 close. Amidst a sea of global negative news and uncertainty, there was a positive embrace of the announcement that CEMATRIX has entered into a five-year Joint Marketing Agreement with Lafarge Canada for the development of cellular concrete markets across Canada.  The plan is to increase sales to the benefit of CEMATRIX and Lafarge by heightening awareness of the construction challenges which can be solved with cellular concrete solutions.

The obvious question is, why would a company the size of Lafarge be interested in a formal agreement that ties the companies at the hip? From CEMATRIX’s perspective, CEMATRIX has been a large customer of Lafarge for many years and the companies have successfully collaborated on many past projects. More importantly, every cubic metre of cellular concrete that CEMATRIX places is a win for Lafarge as it brings new business to the cement giant that may have been previously unavailable.

Lafarge is a major player in the aggregates, cement and concrete industries, and is a world leader that operates in 64 countries and employs 65,000 people. The most recent numbers on the Lafarge website states sales were 15.8 billion Euros in 2012. Lafarge’s recent merger with Holcim in 2015 makes the combined companies the largest cement company in the world.

CEMATRIX has developed and acquired technologies, proprietary formulations and specialized processes that ensure product consistency with endless capabilities. Lafarge has a massive marketing team that could have a material impact on CEMATRIX’s revenues by driving sales and awareness of the innovative product to the next level.

CEMATRIX must be expecting a large increase in sales. It was noted in the news release that in order to meet the expected demand with the new working relationship, CEMATRIX plans to invest approximately $2.5 million to build two new dry mix units and have them up and running by the start of the busy season in spring of 2017.  Other equipment requirements may follow.

CVX’s current North American pipeline of potential projects now exceeds $120 million in total, of which 88% is infrastructure related.

To view news release, please click here.

 

CEMATRIX Financial Performance Draws Positive Comments From Well Known Fund Manager

“Pleasantly surprised” was our response to the depth of knowledge displayed today (May 12) by AGF VP and Portfolio Manager Peter Imhof, in response to a video question about CEMATRIX during his appearance on BNN’s Market Call.

We sat up and took notice, as Mr. Imhoff, a long-time and well known fund manager, follows or invests in companies many times the size of CEMATRIX with its $16 million market cap, a number only slightly more than 2015 sales of $15.3 million and $2.8 million in EBITDA. He had a good understanding of operations and commented, “the company has done extremely well over the past year”.

To view BNN clip, please click here.

Mr. Imhoff wasn’t sure of the impact the energy industry malaise would have on CVX going forward. For clarification, management is forecasting revenues will rise to $18 million this year with 75% of that infrastructure related.

Currently, the cellular concrete company is directly bidding on or is included in bids that are in excess of $100 million, 94% of which is infrastructure related.

CEMATRIX May 2016 Presentation_Page_21

CEMATRIX CEO Jeff Kendrick, recently had his first appearance on BNN, which resulted in a very strong volume day and the stock hitting a new high.  

The fact is that many more people are paying attention to CVX. You don’t always know who’s watching, but the reasons for the interest are plentiful:

  • Continuing financial performance
  • Tight share structure with only 34 million shares issued
  • Growing bid pipeline
  • Client diversification
  • Proven product, services and proprietary formulations
  • Aversion to dilution – no equity raised in more than a decade   

CEMATRIX Appears on BNN – Stock Hits All-Time High

This morning, CEMATRIX shareholders were greeted with more positive news in the form of new contracts valued at $2.9 million, which brings the company’s contracted total for this year to $11.3 million.

A couple of items that should be of interest to shareholders – first, CEMATRIX is only into the fifth month of 2016 and has already secured more than $11 million dollars in contracts. Last year the company had total revenues of $15.4 million and positive EBITDA of $2.8 million. Management has provided guidance on projected revenues for 2016 to come in at $18 million – a 17% increase from last year.

Secondly, the company is currently bidding on individual projects, any one of which is greater than last year’s total volumes. To quantify this, last year’s total volume was approximately 82,000 cubic meters.  Some of the individual projects this year are calling for anywhere from 50,000 to 100,000 cubic meters.  

Company CEO Jeff Kendrick was interviewed this morning (May 4th) on Canada’s Business Network’s (BNN) Commodities segment hosted by Andrew Bell.  

As of this writing the company’s stock is trading in the $0.55 range and has also reached an all-time high of $0.58 on strong volume.

In this interview, Mr. Kendrick provided his insights on the following:

  • Cellular concrete – what is it made of? How is it made?
  • Benefits of cellular concrete; applications for this product,
  • Company’s decision to shift its focus from energy to infrastructure due to the resource/energy sector crash in 2008/09,
  • Overview of CEMATRIX customers, projects completed, its competition,
  • Cost benefits of using cellular concrete,
  • Revenue growth and factors contributing to this growth.

As a side note, the company’s bid pipeline is now in excess of $100 million.

Click here to read today’s news release.

Click here to view the BNN interview.

CEMATRIX CEO To Appear On BNN Tomorrow

Cematrix President, Founder & CEO Jeff Kendrick will be on Canada’s Business News Network (BNN) tomorrow, May 4th.  Mr. Kendrick will be providing viewers with an overview of its recent record revenues in 2015, the company, continued growth plans.

The live interview will air on BNN’s Commodities segment hosted by Andrew Bell on Wednesday, May 4 at 11:30 am ET/9:30 am MT. 

This will be Mr. Kendrick’s first appearance on BNN.

MicroCapClub Hosting CEMATRIX Presentation

CEMATRIX CEO, Jeff Kendrick will be presenting the CEMATRIX opportunity to a mostly U.S. based audience through Ian Cassel and his MicroCapClub tomorrow, April 21st, at 11:00 am ET.

The call is open to members only and information on becoming a member can be found by clicking here.

Founded in 2011, MicroCapClub is an exclusive forum for experienced microcap investors focused on microcap companies (sub $300m market cap) trading on United States and Canadian markets. MicroCapClub was created to be a platform for experienced microcap investors to share and discuss stock ideas. MicroCapClub’s mission is to foster the highest quality microcap investor community, produce educational content for investors, and promote better leadership in the microcap arena. MicroCapClub was founded by full-time microcap investor Ian Cassel and is co-owned by full-time microcap investor Mike Schellinger (aka MikeDDKing).

CEMATRIX – Top Companies To Watch, CEO Jeff Kendrick Interviewed

CEMATRIX reached an all time high share price this past Friday, closing at $0.44 on the heels of CEO, Jeff Kendrick’s appearance at a highly attended Microcap Conference in Toronto. It is an understatement that he was well received by hundreds of potential new shareholders from both Canada and the U.S. over the two day event.

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While in Toronto, SmallCapPower.com was kind enough to interview Mr. Kendrick in the short attached video where he shares why now is the time to take a close look at CEMATRIX and why he believes it is undervalued. CEMATRIX is coming off a record 2015 where revenues exceeded $15 million and EBITDA was $2.8 million with only slightly more than 34 million shares issued.

Since the start of 2016, management has announced new contracts that have already reached a total of $8.4 million.

To watch the interview, please click here.

CEMATRIX – A Standout Venture Exchange Performer

Let’s start this with some key highlights from 2015:

  • 76.5% increase in sales to $15.38 million
  • EBITDA of $2.85 million
  • EBITDA per share of $0.08
  • Income up nearly $2.5 million
  • Gross margin increased to 32%

CEMATRIX is coming off a breakout year which is attributed to tireless management who have taken salary cuts, driven trucks and operated equipment to ensure the company’s survival through some incredibly difficult times.  All the painstaking growth was executed without issuing any equity, keeping the sharecount to a tight 34.2 million.

There are few companies on the Venture Exchange that can boast this kind of performance and management is predicting strong growth through 2016 with a targeted $18 million in revenue and increased EBITDA.  

Although CEMATRIX cut its teeth in the oil sands, originally pouring tank bases, over 90% of projected revenue for 2016 and beyond comes from the lucrative infrastructure market where its specialty concrete provides innovative solutions. Currently there are several large projects that management are bidding on that eclipse all past pours and add significant blue sky to this story.  

Shareholders will appreciate the recent run up to a new all time high as the share price briefly reached $0.39 this week. But even as CEMATRIX revenues continue to grow, as of this morning it is trading at $0.36, reflecting a valuation of just over $12 million.

To view today’s news on 2015 Year End results, please click here.

CEMATRIX Solidifies Important Chartered Banking Relationship

Shareholders should appreciate the importance of today’s announcement that CEMATRIX has signed an operating line credit facility with Canadian Western Bank. At the outset of 2015, which turned into a record year for CEMATRIX, RBC determined that it was unable to provide the level of working capital financing required by CEMATRIX to support the forecasted sales growth that management had predicted.

CEMATRIX was then faced with a situation that if its business activity did in fact rapidly escalate as forecasted, it’s working capital flexibility was severely restrained. In order to remedy this situation, CEMATRIX management, with the assistance of RBC, was diligent in securing a credit facility with Tallinn Capital in May of 2015. for up to $2 million. This would  fund operations through its busy season by way of factoring an interim Mezzanine loan to replace its former credit facility.  Although the money was expensive, carrying a 16.5% to 22% interest rate, it was necessary for CEMATRIX at the time to achieve a successful year.

As a side note, management believes close to 90% of its 2016 revenues will be driven by infrastructure projects.

Today, CEMATRIX announced it has signed a credit facility with Canadian Western Bank for up to $2 million bearing an interest rate of 4.70% or 2% above prime, whichever is greater. It should be noted that management has been extremely complimentary to Tallinn Capital for the support it provided to CEMATRIX and the lending group also played an important role in solidifying the new relationship with Canadian Western Bank.

The timing of this news is most welcome as CEMATRIX announced this past January that it exceeded its forecasts for 2015. Management is on the record that it expects  2016 to be even more robust. Audited 2015 year end results will be released in early March.  

To view today’s news release, please click here.

CEMATRIX – $15 Million in 2015 – What’s Next?

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CEMATRIX management today offered some guidance on their record 2015, and it was announced that the company both exceeded its goal of $15 million in sales and forecasted EBITDA of $2.5 million.

Audited financials and full details of the record year won’t be available until March when the company files its year end, but shareholders can now bask in management’s performance as we look ahead to another record year.

2016 is off to a stellar start and CEMATRIX also announced today that it has secured another $1.3 million in contracts for this year, where total contracted work now sits at $4.2 million.  

Jeff Kendrick, CEO of CEMATRIX, said,  “This is a significant achievement for 2015 and we expect continued growth for the foreseeable future. The additional $1.3 million in contracts for 2016 puts the Company in a great position to start off the New Year the same way we started 2015 – strong sales in the off season.”

To read full news release, please click here.

Video Presentations From Opportunity Knocks VII Investor Conference Now Available

This past October 29th, The Howard Group hosted its 7th Annual “Opportunity Knocks” Investor Conference in Toronto. Five client companies from a wide variety of industries presented to an audience of approximately 100 fund managers, investment advisors and private investors.

Presenting client companies:

  • Robix Alternative Fuels Inc. | RZX:CSE
  • ICEsoft Technologies | (pending RTO)
  • Symbility Solutions Inc. | SY:TSX-V
  • VidWrx Inc. | VID:TSX-V
  • CEMATRIX Corporation | CVX:TSX-V
  • Grande West Transportation | BUS:TSX-V

The High Definition presentations are now available for viewing on The Howard Group website. To access the presentations, please visit our Events page or click here.

The event was sponsored by CNW Group, SmallCapPower, Modern Concierge, Stockhouse and Visual Capitalist.


About the Howard Group Inc.

Since 1988, The Howard Group has provided comprehensive investor outreach and capital markets programs, business development solutions, strategic planning and financing services to public companies. The Howard Group is associated with the Insight Limited Partnership II, which invests in micro and small cap companies.

The Howard Group also provides ongoing commentary on its client’s activities through the “Insight Live!” blog. Interested parties are encouraged to subscribe on our website at: https://howardgroupinc.com/follow-our-clients/

CEMATRIX Reports Record Q3/2015 Results – 2015 Will Be A Banner Year

Following up on its successful first half of 2015, Cematrix continues to gain momentum in the second half by finishing the third quarter (September 30th) with contracted sales at an all time record level – $16.2 million ($15.0 million for 2015 and $1.2 million for 2016).  

Given the current challenging conditions in the energy sector and the overall economy, the Company continues to deliver solid financial results and metrics.  

Some of the financial highlights for Q3 2015:

  • Year-to-date sales for the first nine months were $9.076 million and income before taxes  at $908,863 – both a record high for the company.
  • Sales for  Q3/2015 were up significantly at $4.09 million compared to just over $967 thousand  in Q3/2014 – an impressive 323% increase.  The bulk of this increase came from a large project in the Alberta oil and gas sector which the Company predicts will continue into 2016.  Infrastructure sales also increased.
  • Income before taxes for the third quarter were  $985 thousand.
  • Gross margins were a healthy 42%, rising to $1.72 million as a result of  higher sales and tight control of expenses.
  • Operating income for Q3/2015  was  $1.17 million compared to a loss of $459 thousand in Q3/2014  – a gain of $1.63 million.
  • EBITDA for the quarter was $1.219 million versus a negative $365 thousand in Q3/2014.

Of note is that management has stated that it expects EBITDA in 2015 to reach as high as $2.5 million. There are just over 34 million shares issued, with a market cap as of this writing of just over $7 million.   

It is forecasting 2016 revenues of $18 to $20 million with 90% of that coming from infrastructure versus energy projects.The bid pipeline now exceeds $100 million.

To view today’s news release, please click here.

CEMATRIX Confirms Breakout Year

Cellular concrete company, CEMATRIX has very clear traction with another contract announced today, which takes the 2015 total to $15 million. Today’s news announced that the company has secured a contract for just under $1 million this morning and President and CEO Jeff Kendrick stated that as of today’s date, the company has already placed 24% more cellular concrete than it did in all of last year.  

With a record $15 million contracted to be completed in 2015 it is surprising that CVX is trading with a market cap of just $7.5 million as of this writing.  Management expects CEMATRIX will finish the year EBITDA positive between $2 – $2.5 million and have projected revenues for 2016 between $18 – $20 million.

To view today’s news release, please click here.