Great trade : TWLO +50% (8/16)

• b:  Aug 5 @ $40.50
• s: Aug 15 @ $60  (+50%)

Pure Storage (PSTG) reported earnings on Thur 8/25/16 (a/h)

** charts before earnings **

** charts after earnings **

    

Pure Storage beats by $0.07, beats on revs; guides Q3 revs in-line:

• Reports Q2 (Jul) loss of $0.16 per share, $0.07 better than the Capital IQ Consensus of ($0.23); revenues rose 92.8% year/year to $163.21 mln vs the $155.11 mln Capital IQ Consensus.
• Quarterly gross margin: 65.2% GAAP; 66.3% non-GAAP, up 6.7 ppts and 7.1 ppts Y/Y, respectively, and in line with non-GAAP gross margin guidance of 65-68%.
• Co issues in-line guidance for Q3, sees Q3 revs of $187-195 mln vs. $189.03 mln Capital IQ Consensus Estimate; sees Non-GAAP gross margin in the range of 64% to 67%; sees Non-GAAP operating margin in the range of -17.5% to -13.5%

Mattress Firm (MFRM) to be acquired by Africa’s Steinhoff for $64/sh

Mattress Firm (MFRM) to be acquired by Steinhoff (SNHFY) for $64 per share.  (8/8/16)

   

Steinhoff International Holdings NV, with headquarters in Johannesburg, announced July 8 that it planned to acquire Houston-based Mattress Firm Holding Corp. for $64.00 per share in cash, or $2.4 billion. The offer was unanimously approved by the boards of both companies and will result in the largest multi-brand mattress retail distribution network in the world.

On Aug. 29, the deal earned U.S. regulatory approval with the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, according to a Mattress Firm news release. As of this writing, the acquisition is expected to close by the end of the third quarter.

Steinhoff is a leading international retailer that manufactures, sources and sells furniture, household goods and clothing in Europe, Africa and Australasia. Steinhoff also is an automotive retailer in southern Africa. Nicknamed “Africa’s Ikea,” it operates through 6,500 stores under more than 40 retail brands in 30 countries, and employs about 105,000 people. Founded in 1964, the company is traded on the Frankfurt Stock Exchange and Johannesburg Stock Exchange. In 2015, Steinhoff reported $10.97 billion in revenues.

Publicly held Mattress firm operates 3,500 company-owned and franchised stores throughout the contiguous United States. Founded in 1986, it is the largest mattress retailer and sleep-shop chain in the country. Its 2015 sales exceeded $3.5 billion.

According to news reports, Steinhoff’s offer surprised market analysts and industry observers, as it represented a 115% premium on Mattress Firm’s closing stock price of $29.74 per share on Aug. 5.

Steinhoff chair Christo Wiese defended the offer price in a televised Aug. 12 interview with CNBC Africa: “One must be very careful to equate share prices with value. You often find that the share price is way above value—and sometimes you find that the share price is below true value. … We’ve made offers (in the past) and someone came along and offered more, and I think—in a very disciplined manner—we’ve said, ‘Thank you, but no thank you.’ We will only buy at what we consider to be fair value.”

Wiese added, “(Mattress Firm) is in a product area … that is part of Steinhoff’s DNA. Steinhoff knows about mattresses—manufacturing them, distributing them and selling them. … Steinhoff’s ambitions are quite well known to the market. It intends to be a global player; it’s already there. (But) it’s rather difficult to think of oneself as a global player, if you ignore the largest economy in the world.”

In a news release, Markus Jooste, Steinhoff chief executive officer, said he looked forward to welcoming Mattress Firm’s “entrepreneurial management team” and its “employees to be part of one of the world’s leading multi-format retailers.”

Steinhoff is financing the purchase through a combination of bank and bridge loans; the transaction’s closing is not subject to any financing conditions.

FireEye (FEYE) reported earnings Thur 4 Aug 2016 (a/h)

** charts before earnings **

 

** chart after earnings **

FireEye beats by $0.06, misses on revs; guides Q3 EPS in-line, revs below consensus; guides FY16 EPS in-line, revs below consensus; discloses restructuring plan  :

• Reports Q2 (Jun) loss of $0.33 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of ($0.39); revenues rose 18.9% year/year to $175 mln vs the $181.57 mln Capital IQ Consensus.
• Co issues guidance for Q3, sees EPS of ($0.32)-($0.30), excluding non-recurring items, vs. ($0.24) Capital IQ Consensus Estimate; sees Q3 revs of $180-186 mln vs. $208.09 mln Capital IQ Consensus Estimate.
  • Total Billings in the range of $200-215 mln.
  • Operating margin in the negative 25-27% range
• Co issues guidance for FY16, sees EPS of ($1.32)-($1.24), excluding non-recurring items, vs. ($1.24) Capital IQ Consensus Estimate; sees FY16 revs of $716-728 mln vs. $793.45 mln Capital IQ Consensus Estimate.
  • Non-GAAP Billings in the range of $835-855 mln (Prior $975-1055 mln)
  • Non-GAAP Operating Margin in the range of negative 26-28%
• On August 2, 2016, FireEye's Board of Directors approved a restructuring plan and reduction in workforce to reduce operating expenses and align the company's expense structure with current growth expectations to achieve non-GAAP profitability in the fourth quarter of 2017. FireEye expects the restructuring will reduce total non-GAAP costs by at least $20 million in the fourth quarter of 2016, and currently estimates that it will recognize pre-tax charges to its GAAP financial results of between $15 and $20 million, consisting of severance and other one-time termination benefits and other associated costs.

At Home (HOME) began trading on the NYSE on 4 August 2016

Home décor retailer At Home is the first retailer to IPO this year

• Sector: Consumer Cyclical
• Industry: Specialty Retail
• Full Time Employees: 5,364
• Founded in 1979 
• Headquartered in Plano, Texas
• https://www.athome.com/

The brick-and-mortar retailer on Thursday debuted on the New York Stock Exchange under the ticker symbol HOME, with shares most recently trading at $15.15 apiece—just 15 cents above the issue price.

At Home is unprofitable despite the fact that revenue is growing steadily, reaching nearly $500 million last year as the retailer continues to sell more pillows, furnishings, and other home goods using a low pricing strategy that requires few discounts.

Chief Executive Lee Bird shrugged off the initial market response. “We are a high growth retailer,” he says. “We believe we are an attractive company to investors because we will deliver on the growth expectations.”

The store growth story at At Home is also alluring. The retailer operates 115 stores across 29 states but sees potential to expand the concept to as many as 600 locations. It hasn’t yet addressed some of the biggest retail markets, including California and the New York tri-state area. But Bird says results are encouraging in similar markets, like Phoenix and D.C., indicating the concept can be successful when expanded to more states.

Betting on At Home means investors are comfortable with the retailer’s all-in strategy on physical stores. It doesn’t yet operate an e-commerce business and has a very minimal social media presence. At Home says it hasn’t yet committed to eventually conducting a business online.

Enviva Partners (EVA) reported earnings Wed 3 Aug 2016 (b/o)

• Div/yield 0.52/9.37

** charts before earnings **

** charts after earnings **

Enviva Partners beats by $0.05, misses on revs, updates FY16 guidance :

• Reports Q2 (Jun) earnings of $0.47 per share, $0.05 better than the two analyst estimate of $0.42; revenues rose 9.1% year/year to $119.7 mln vs the $123.17 mln Capital IQ Consensus.
• The Partnership updated its full-year 2016 guidance.
  • The guidance amounts provided do not include the impact of any potential acquisitions from the Partnership's sponsor or others.
  • The Partnership now expects full-year 2016 net income to be in the range of $40.0 million to $42.0 million, which reflects higher non-cash compensation expense and non-cash asset impairment and disposal charges than previously anticipated, and adjusted EBITDA to be in the range of $86.0 million to $88.0 million, which reflects the Partnership's better-than-expected performance during the first half of 2016.
  • The Partnership expects to incur maintenance capital expenditures of $4.0 million and interest expense net of amortization of debt issuance costs and original issue discount of $12.0 million in 2016.
  • The Partnership expects full-year distributable cash flow to be in the range of $70.0 million to $72.0 million, prior to any distributions attributable to incentive distribution rights paid to the general partner, which reflects the expected improvement in full-year adjusted EBITDA.
  • For full-year 2016, they expect to distribute at least $2.10 per common and subordinated unit.

Inovalon (INOV) reported earnings Wed 3 Aug 2016 (a/h)

** charts after earnings **

  

• Q2 revenue miss, and FY16 EPS and revenue guidance below consensus.

Second Quarter 2016 Highlights

• Second quarter revenue of $123.8 million
• Second quarter net income of $16.3 million, resulting in diluted net income of $0.11 per share
• Second quarter Non-GAAP net income of $20.6 million, resulting in Non-GAAP diluted net income of $0.14 per share
• Second quarter Adjusted EBITDA of $40.8 million
• MORE2 Registry® dataset medical event count expanded to more than 11.7 billion
• Accelerating transition to pure cloud-based platform and adjusting 2016 financial guidance