NEW YORK, NY / ACCESSWIRE / August 30, 2017 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced it has issued an update on FTE Networks, Inc. (OTCQX: FTNW).
The report is available here: FTNW Update Note.
Based in Naples, FL, FTE Networks, Inc. (OTCQX: FTNW, "FTE Networks") is a leading provider of innovative technology-oriented solutions for smart platforms, network infrastructure, and buildings. FTE Networks has three operating subsidiaries, including: FTE Networks Services, which provides network infrastructure solutions; CrossLayer, which provides managed network services via an advanced network and cloud platform; and Benchmark Builders, which provides construction management for complex projects. Through these three complementary businesses, FTE Networks provides end-to-end design, build and support solutions for state-of-the-art networks and commercial properties to create transformative smart platforms and buildings. FTE has made several advancements since our last update note on the company, with highlights including:
- FTE completed the acquisition of Benchmark Builders, Inc. ("Benchmark"), adding a robust sales pipeline and technology complex interior construction capability
- FTE reported record 2Q17 revenues of $50.2mn, which included contribution from Benchmark
- FTE generated healthy adjusted operating income of $2.3mn, or 4.5% of revenues
FTE completes acquisition of Benchmark Builders
FTE completed the acquisition of Benchmark on April 20, 2017. The transaction adds significant scale and expands FTE's service capabilities, while adding marquee customers and more than doubling its sales backlog. Founded in 2008, Benchmark brings expertise in technologically complex interior construction, with experience in large projects in the telecommunications, commercial real estate, industrial, broadcast, technology, infrastructure, healthcare, and education industries. The combined company now has more than 200 employees and operations in 17 states and Europe. Importantly, the addition of Benchmark adds significant complementary services to FTE's offerings, enabling the company to offer a full suite of end-to-end solutions to design, build and outfit customer locations with advanced, flexible network and connectivity solutions using its multi-edge computing strategy.
FTE reports record revenue of $50.2mn, positive adjusted operating income for 2Q17
FTE reported record revenues of $50.2mn in 2Q17, as compared to $3.2mn in the year-ago period. The rise in revenues was primarily due to the company's acquisition of Benchmark, which was included in results beginning April 21, 2017. In the results announcement, FTE Chief Executive Officer and President Michael Palleschi stated that the company had built "positive momentum" since the closing of the Benchmark transaction, and we look forward to learning more about how the company's new multi-edge computing solution is being received in the market. Benchmark accounted for $44.5mn in revenues during this partial period. Core FTE revenues without the impact of Benchmark did increase by 96% to $5.3mn, versus $3.2mn in 2Q16. At the end of 2Q17, the company had a combined backlog of $346.7mn, according to its 10-Q filing.
Increasing target to $3.20 target following Benchmark deal
We are increasing our target for FTE Networks to $3.20 per share following the closing of the Benchmark deal. The target implies an Enterprise Value of 1.2x the company's backlog of $347mn, and 13.5x 2018E EV / EBITDA, assuming 134.9mn shares and net debt of approximately $70mn. Upcoming catalysts for FTE include a planned listing on a major exchange and 2H17 operating results, which are expected to show increasing revenues.
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About FTE Networks, Inc.
FTE Networks, Inc. (FTNW) a leading provider of innovative technology-oriented solutions for smart platforms, network infrastructure, and buildings. FTE's three complementary businesses are FTE Networks Services (network infrastructure solutions); CrossLayer, Inc. (managed network services with a first-of-its-kind advanced network and cloud platform); and Benchmark Builders, Inc. (construction management), which provides end-to-end design, build and support solutions for state-of-the-art networks and commercial properties to create the most transformative smart platforms and buildings. FTE's businesses are predicated on smart design and consistent standards that reduce deployment costs and accelerate delivery of innovative projects and services. The company works with Fortune 100/500 companies, including some of the world's leading communications services providers. FTE Networks and its subsidiaries operate three lines of business of which service the following areas: Data Center Infrastructure, Fiber Optics, Wireless Integration, Network Engineering, Internet Service Provider, Construction Management, General Contracting and Pre-Construction Services. With more than 200 employees, FTE and its entities have operations in 17 states. www.ftenet.com.
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