Fiscal 3Q2020 (June) Quarter in line with expectations. Higher revenue was offset higher operating costs so gross profit of $2.8 million and adjusted EBITDA of $1.4 million were in line.Fine-tuning FY2020 EBITDA. We are moving our FY2020 EBITDA estimate to $3.4 million from $3.5 million to reflect fiscal 3Q2020 operating results and more moderate gross margin assumptions due to project cancellations/delays. Uncertain outlook and lower backlog, but signs of recovery. Backlog dropped to was $69.8 million in 3Q2020 from $92.1 million in 2Q2020 due to the shifts in project timing. Current bidding activity continues and adding projects seems likely, but the COVID-19 uncertainty and low energy prices remain concerning and project might be delayed/cancelled.Credit line extended by one year and financial position supported by PPP loan. On July 30th, the $15.0 million operating line of credit was extended for one year effective June 28, 2020. In order to bridge any potential funding gaps prior to the extension, an application to the Small Business Administration’s Paycheck Protection Program (PPP) was submitted and approved. About $3.3 million of the original approved loan of $13.1 million was returned once it was determined that it was not needed. As of August 13, 2020, all of the PPP loan was utilized, in accordance with the SBA guidelines, to maintain employment during the COVID-19 crisis. Before the end of FY2020, a request to forgive the PPP loan will be submitted to the SBA.Stock buyback program suspended in late April after minimal activity. Given the market uncertainty and the focus on maintaining financial stability, the buyback program was suspended and dividends are likely to take precedent going forward, especially if there is positive news on pending litigation.Maintain Outperform rating and 12-month price target of $1.47/share. We believe that the current enterprise value multiple of 2.9x estimated FY2020 EBITDA (pro forma for PPP loan forgiveness) is attractive. Other positives include the high backlog, receipt of the PPP loan, the prospects for PPP loan forgiveness and high insider ownership. While the year started on a more positive note and the stock traded above the $1.00/share level prior to COVID-19, the stock has fallen back and is now only up ~1% year to date and we believe that the risk/reward profile remains attractive.Read More >>