EPS was (nil) largely in line with estimates; Revenue of $49.6M beat estimates of $43.3M. The CEO noted 'ECN is well-positioned to deliver growth in 2024'. EPS guidance for the year of 10c to 16c was maintained. Originations were $468.4M vs $503.1M. Managed assets were $5.2B vs $4.9B. EBITDA nearly quadrupled to $21.8M from $5.5M. Operating expense control was good, with lower expenses vs the preceeding quarter. ECN has struggled for some time, but this quarter may be a light at the end of a tunnel. It is highly sensitive to rates and the economy, so when interest rates drop there could be improvement. ECN serves more than 100 financial institutions providing loans to their clients. Its divisions are:
ECN operates through three long-standing, market-leading businesses with unparalleled experience and expertise:
- Triad Financial Services - manufactured home loans
- Source One Financial - Nationwide Marine & RV lending
- Intercoastal Finance Group - National Marine & RV lending.
Management has built and sold several businesses over the past 20 years. In 2021 ECN paid a special $7/share dividend after selling a division. There was a CFO change earlier this year, but our main thesis on the company comes from the ability of the CEO and his past accomplishments. It is small, and needs to be considered a high risk stock, but the quarter was good and the outlook has improved vs last year.