Badger Daylighting Explodes on Improved Quarter, Higher Dividend


In May, Badger Daylighting (TSX:BAD) slipped from a multi-year high at $36.04 to around $30 and then fell off a precipice, diving to as low as $21.42. A couple months of slow and steady recovery has now been followed by a jump in shares on Monday underscored by a solid second quarter and dividend hike.

North America’s biggest provider on non-destructive excavating services reported revenue growth for his Hydrovac service increased to $113.46 million, up from $83.74 million in the year prior quarter. Hydrovac services, the Calgary-based company’s flagship product is used for safe digging in congested areas by using water pressure to liquefy the soil and remove it via a vacuum system, make up the bulk of Badger’s revenue.

Other services and truck placement revenue chipped in to bring total revenue for the quarter to $123.35 million, handily topping the $91.98 million posted in Q2 last year.

Management noted an array of reasons as supporting higher sales, but specifically noted infrastructure, construction and energy sectors. Revenue growth was experienced both in the U.S. and Canada. Revenue in Canada climbed from $31.2 million to $35.2 million and in the States from $47.0 million to $65.7 million.

During the first half of the year, total revenue increased to $225.16 million from $180.14 million a year earlier.

Net profit came in at $14.72 million, or 40 cents per share, for the quarter, versus $5.95 million, or 16 cents per share, in last year’s quarter. For the first six months of 2017, net profit was $18.42 million, or $0.50 per share, compared to $9.62 million, or $0.26 per share.

Further, Badger’s Board approved a 15% increase in the monthly dividend to 3.8 cents from 3.3 cents, starting with September’s payment for August.

Looking ahead, Badger didn’t provide outlook on expected financial performance, but it does foresee strong demand. To that point, the company forecast new Hydrovac builds this year to be towards the high side of guidance (100-160 units). It also expects to retire a few more trucks than first thought, saying now between 50-60 units, rather than 40-50 units.

Bay Street has liked what it heard today, sending shares rallying as high as $33.50 before cooling back some for a gain of 14.7% at $30.23 to complete the recovery since the tailspin in May.