In Q4-2024, TVK’s revenues grew by 33% to $230.6M, compared to $173.9M in the same period last year. The growth was mainly due to the three large recent acquisitions of LV Energy Services (LV), its sister company, Advance Engineered Products (AEPL), and Highland Tank Holdings (HT). Excluding the numbers from all the acquisitions (LV, AEPL, HT), revenues actually showed a slight decline compared to the same period last year.
EBITDA growth for the quarter and the full year remains very solid, representing a growth rate of 32% and 56%, respectively, while the adjusted EBITDA margin remained in line with the prior year at 20.6%. TVK also announced a 17% increase in dividends, which is fine, although we would prefer the company retain its cash to make more accretive acquisitions. There was some meaningful dilution where its FY2024 shares outstanding increased to 19,501,433 from 17,912,499 in FY2023, representing a 9% growth rate in shares outstanding, resulting from the company issuing shares to make acquisitions and pay down debt (it issued 1.3M shares through the bought deal offering that was announced back in May). In fact, this year was the first time TVK has actively issued shares meaningfully since going public, which may signal management believes valuations are relatively high compared to historical averages.
Overall, we continue to like the name, given its strong level of execution, but we feel investors need to temper their expectations a bit going forward, particularly given its strong recent run.