Covalon Technologies yesterday announced it is on the hunt for potential acquisitions alongside second quarter earnings results.
The Ontario-based company said it formed a special board committee looking to evaluate possible strategic alliances, partnerships and acquisitions as a response to a $100 million contract the company recently won.
“The board believes that the capital markets have not yet fully appreciated the impact of the highly transformative recent announcement of $100 million of contracted revenue over the next three years in addition to many other significant initiatives underway,” the company wrote in a press release.
Covalon said that it has already made steps towards a potential acquisition, having identified “a clear set of criteria for potential acquisitions” that would complement its internal growth. The company also announced plans for a potential buy-back of common shares, though the plans are subject to regulatory approval.
In its earnings release, Covalon posted losses of $479,082 on sales of $5.7 million for the three months ended March 31.
“Based on second quarter results and anticipated business in the second half of the fiscal year, the Company is very much on track to achieve year-over-year revenue growth for fiscal 2018, compared to fiscal 2017’s $27.3 million in revenue. Our revenue in the United States has more than doubled in the first six months of fiscal 2018, compared to last year. Our Middle East contracted deliveries are unfolding according to our delivery expectations, without taking into account any of the $100 million of contracted revenue over the following three years. I am very pleased with our performance year-to-date. More importantly, Covalon has never been on better financial and operational footing in its entire history. The Company currently has a clean balance sheet with no debt, has secured significant future contracted revenues, and has more than 150 United States FDA-cleared products and over 30 patents to protect its world-class technology platforms. We are working on many positive initiatives and are exploring many different expressions of interest,” prez & CEO Brian Pedlar said in a press release.