Pulse Seismic Quick Update - $PSD.to

Quick update after Q2 2024

*Disclosure: I own shares in PSD. I am not a professional. Please do your own due diligence.

Price: $2.40 CAD

MC: 124 million CAD

EV: 115 million CAD

Yield: 2.5% (not including special dividends)

1 year performance: +34% (not including dividends)

PSD reported yesterday after the close. Results were in line of my expectations and the stock was essentially flat.

Quarter Recap

• Revenue was 6.3 million vs 8.7 million in Q2 last year.

• EBITDA was 4.4 million vs 6.9 million last year.

• They are paying out a special dividend of $0.05 per share payable on August 21.

• They have canceled 2.2% of their shares outstanding YTD.

Closing Thoughts

I don’t have much to add to the results. I am happy that they are doing the special dividend and continue to buyback shares. They didn’t mention any meaningful contracts yet to be recognized before the end of the year which leaves me to believe they will not surpass last years’ H2 revenue. They have a very tough comp to last year’s H2. I’m not expecting any more special dividends this year unless we see a large contract win. I am expecting continued buybacks and potentially increasing the regular dividend at the end of the year. I like the conservative management team and very low operating costs.

I continue to hold in a basket of OFS cos.

Valuation

PSD is trading around 4.2x EV/trailing EBITDA. I have them trading at 5.4x EV/3 year average EBITDA which may be a better way of looking at the business. This also equates to roughly 7-8x EV/FCF using 3 year average numbers.

Thanks for reading.

Dean

* long PSD.to