Strategy report top 10 picks for 2019

January 9, 2019

SINGULAR RESEARCH 22287 MULHOLLAND HWY #417 Calabasas, CA 91302 www.singularresearch.com

Market Sentiment •

“Be fearful when others are greedy and greedy only when others are fearful.”

- Warren Buffet.

Singular Research Performance •

14 years of cumulative outperformance (8/2004 – 9/2018)

Singular Research vs. S&P 500

Cumulative Returns 8/2004 - 9/2018

312%

400% Singular Research List

350% 300% 250% 200% 150% 100% 50% 0%

300%

312%

200% 184%

151%

100% 0%

Singular Research

S&P 500

Russell 2000

S&P 500

-100%

151%

Top Picks for 2019 Current Price (as of 1/7/19)

EPS 1 yr growth est.

P/E LTM

% Price Target Upside

Name

Symbol

Emergent BioSolutions

EBS

$59

30

35%

$70

19%

NV5 Global

NVEE

$62

22

18%

$100

61%

Harsco

HSC

$20

16

12%

$33

63%

Control4

CTRL

$18

26

7%

$30

64%

Kulicke and Soffa Industries

KLIC

$20

9

3%

$31

56%

QuinStreet

QNST

$16

42

39%

$20

23%

Transcat

TRNS

$19

22

8%

$28

43%

Olympic Steel

ZEUS

$16

4

-34%

$22

35%

Harvard Bioscience

HBIO

$3

45%

$7

99%

Daktronics

DAKT

$8

43%

$10

31%

Average

50

49%

Team Member Biographies Robert Maltbie, CFA Robert is the founder of Singular Research, as well as Millenium Asset Management and the Argonaut 2000 Partners, LP. Argonaut is the only fund that relies exclusively on Singular Research for investment ideas. Mr. Maltbie is also co-founder of Solaris Select. Mr. Maltbie has over 30 years of experience in money management. He began his career as an investment adviser with Morgan Stanly Dean Witter in 1983 and later joined Spear Financial in 1992 where he created and managed its equity research department. In 1994 Mr. Maltbie joined Salomon Smith Barney in Beverly Hills, California where he managed growth portfolios for private and institutional clients. Mr. Maltbie founded the General Part in 1999 and holds a controlling interest. He has a BA in Political Science from UCLA and is a member of the CFA Institute and the CFA Society of Los Angeles. Robert also holds the Chartered Financial Analyst designation.

Team Member Biographies Jim Marrone, CFA In addition to working as an equity research analyst for Singular Research, Jim also works as a CFA instructor for Fitch Learning. He covers small-cap stocks and writes investment reports that incorporate valuation models supported by qualitative and quantitative analysis. As a CFA instructor, Jim helps candidates prepare for the Chartered Financial Analyst (CFA) exam and also contributes as a subject matter expert (SME) developing material for many leading financial training institutes globally. Jim enjoys providing keen insight in financial analysis and modeling and it is reflected in the favorable evaluations he has received over the years.

His experience also includes work as a founding member of faculty for the Dubai, UAE campus of a leading European business university where he taught at both the undergraduate (BBA) and graduate level (MBA) contributing to the growth and reputation of the programs for over three years.

Team Member Biographies Christopher J. Sakai, CFA, MBA Prior to working as an Equity Research Analyst with Singular Research, Chris worked as a Wealth Management Analyst. During this time (from 2013 to 2018), he worked with private clients helping them create financial plans. Before his experience as a Wealth Management Analyst, Chris worked as a Junior Investment Analyst, gaining exposure to investment research and stock selection. He holds the CFA designation, an MBA from Pepperdine University, an MS from Purdue University, and a BA from Claremont McKenna College. He is an active surfer, skier, scuba diver, and runner.

Team Member Biographies Lisa Springer, MBA Before joining Singular, Lisa was a senior analyst at Management CV covering healthcare stocks. Lisa also writes for investment websites such as Street Authority and for investment banks. She began her career as a buy-side analyst at Kemper after graduating from University of Chicago business school, then spent the next 15 years in investor relations, first as director of analysis for a large IR consulting firm, then as the Director of Investor Relations for a NYSE-listed REIT.

SINGULAR RESEARCH 22287 MULHOLLAND HWY #417 Calabasas, CA 91302 www.singularresearch.com

Singular Research

Emergent BioSolutions (EBS)

November 7, 2018

Q3:18 revenues rise 16% YOY. Transaction costs for PaxVax and Adapt Pharma cause cut in guidance for FY:18 EPS, but these accretive deals push FY:19 revenues above $1 billion. We reduce rating to Buy/Long Term and raise our EBS price target from $60 to $70.

Price (as of close on November 6, 2018)

$68.88 Rating

52-Week Range Shares Outstanding Insider/Institutional Public Float Market Capitalization

Buy /Long Term New 12- Month Target Price

$70.00

FYE DEC EPS ($)*

Lisa Springer 818-222-6234 research@singularresearch.com

FY 2017 ACTUAL

Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year P/E Ratio Change

$0.29A $0.13A $0.73A $0.74A $1.90A 35x

FYE DEC Revenue ($ mil.)

Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year* Change

$36.36 – $69.30 51.2 million 15% /85% 43.4 million $3,500 million

FY 2017A ACTUAL

$116.9A $100.8A $149.4A $193.8A $560.9A

Debt (millions) Debt/Equity ROE (LTM) Book Value/Share Daily Volume

FY 2018 CURRENT PREVIOUS

$(0.03)A $1.07A $0.55A $0.59E $2.17E 31x 14%

FY 2019 CURRENT PREVIOUS

$(0.03)A $1.07A $0.55A $0.93E $2.42E

FY 2018E CURRENT PREVIOUS

$117.8A $220.2A $173.7A $259.0E $771.0E 37 %

$13.5 1% 12.3% $18.89 356k

$117.8A $220.2A $170.0E $226.0E $734.0E -

$0.37E $0.75E $0.71E $1.10E $2.93E 23x 35%

$0.28E $0.72E $0.67E $1.08E $2.76E

FY 2019E CURRENT PREVIOUS

$206.8E $251.8E $247.4E $294.0E $1,000.0E 30%

$146.8E $196.8E $190.4E $237.0E $771.0E -

* Adjusted EPS .Numbers may not add up due to rounding.

Q3:18 Highlights Ø Company Description

Emergent BioSolutions (EBS) is a global specialty life sciences company that develops and commercializes vaccines, drugs and devices that address biodefense threats. The Company is a preferred provider of biodefense products and services to the U.S. government under multi-year contracts. Its most valuable product, BioThrax is the only FDA-approved anthrax vaccine. The Company’s products are sold mainly in the U.S. as well as internationally.

Ø

Ø Ø Ø

Equity Research

Ø Ø

Ø

Product sales rise 17% YOY to $133.3 million as 184% growth in sales of other products offsets 45% decline in sales of BioThrax. Contract manufacturing revenues improved 17% YOY to $22.2 million and contracts and grants revenues increased by 12% to $18.2 million.

The acquisitions of PaxVax and Adapt Pharma are expected to add $270-$300 million to FY:19 revenues and be accretive to adjusted EPS. Through PaxVax, EBS gains vaccines for typhoid and cholera and a foothold in the US travelers’ vaccines market. With Adapt Pharma, EBS acquires NARCAN, the only FDA approved nasal spray for emergency treatment of opioid overdose.

EBS expects to file an Emergency Use Authorization submission for NuThrax in late 2018, clearing the way for deliveries of this next generation anthrax vaccine in 2019 under a $1.5 billion development and procurement contract.

The Company is completing ACAM2000 deliveries under its existing contract and expects to negotiate a multi-year follow-on contract with CDC before year-end.

Phase I studies are underway for an anti-Zika virus immune globulin being developed as a therapeutic against the Zika virus. Completion of the Phase I study is expected in Q1:19 and progress towards commercialization could be rapid due to Fast Track designation by the FDA. EBS successfully expanded sales of its BAT (Botulism Antitoxin) product in new territories and signed a distribution agreement for the BAT product in the EU. EBS ended the quarter with $340 million of cash. The Company incurred $768 million of debt in October in connection with the PaxVax/Adapt acquisitions, which also used $119 million of its cash.

EBS revised its guidance for FY:18 revenues upward from $715-$755 million to $770-$800 million. Adjusted net income was revised downward from $110-$125

Please refer to the end of this report to obtain important disclosure information.

c rh se a e R ar l u g ni S

NV5 Global, Inc. (NVEE)

Nov 13, 2018

NVEE reports 14% increase in Q3:18 revenues and 9% adjusted EPS growth. High single-digit organic growth, a strong M&A pipeline and new project wins position NVEE for continued robust gains. NVEE shares are up more than 50% YTD. We rate these shares BUY and reiterate our $100 price target.

Price (as of close on Nov 12, 2018)

$81.10 Rating

52-Week Range Shares Outstanding Insider/Institutional Public Float Market Capitalization

BUY Price Target

$100.00

FYE DEC EPS ($)

Lisa Springer 818-222-6234 research@singularresearch.com

Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year* P/E Ratio Change FYE DEC Revenue ($ mil.)

Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year* Change

$40.01 – $96.70 12.5 million 22.2% / 54.5% 9.9 million $1.0 billion

FY 2017A ACTUAL

$0.39A $0.56A $0.75A $0.71A $2.38A 34.1x 55.9% FY 2017A ACTUAL

$64.0A $83.7A $91.2A $93.9A $333.0A 48.7%

Total Debt Debt/Equity ROE (LTM) Book Value/Share Daily Volume (3 mo. Avg.)

FY 2018E CURRENT PREVIOUS

$0.59A $0.91A $0.82A $0.94E $3.27E 24.8x 37.5%

$0.59A $0.91A $0.98E $0.86E $3.25E

FY 2018E CURRENT PREVIOUS

$94.5A $104.0A $104.2E $120.2E $423.0E 27.0%

$94.5A $104.0A $109.5E $108.0E $416.1E

$35 million 3.5% 14.1% $25.92 81,061

FY 2019E CURRENT PREVIOUS

$0.70E $0.94E $0.98E $1.23E $3.84E 21.1x 17.5%

$0.72E $1.16E $1.37E $1.23E $4.48E

FY 2019E CURRENT PREVIOUS

$115.3E $126.9E $127.1E $146.7E $516.0E 22.0%

$115.3E $126.9E $133.6E $131.8E $507.6E

* Numbers may not add up due to rounding. * All numbers are non-GAAP.

Q3:18 Highlights Ø

Q3:18 revenues rise 14% YOY to $104.1 million, fueled by 8% organic growth and contributions from recent acquisitions. The Company exited the quarter with backlog up 24.6% YOY to $342.3 million and 8.6% higher sequentially.

NVEE targets FY:18 revenues 25-29% higher at $415-$430 million.

Ø

EBITDA improved 10% YOY to $14 million and EBITDA margins were flat at 17% in Q3:18 versus Q3:17.

Ø

Adjusted EPS grew 9.3% YOY. NVEE is guiding for FY:18 adjusted EPS 3645% higher at $3.23-$3.43.

Ø

During Q3, the Company was awarded a $5 million contract with the New Jersey DOT, a $10 million contract with the New York City DOT and a $20 million contract with California Transportation District 10.

Ø

NVEE continues to have plenty of acquisition candidates in the pipeline that can expand its geographic footprint and service lines. The November acquisition of CHI Engineering provides a strong platform for NVEE’s expansion in the LNG, LPG and natural gas markets.

Ø

We rate these shares BUY-Long-Term and reiterate our $100 price target.

Company Description

Equity Research

NV5 Global, Inc. is a provider of professional and technical engineering and consulting solutions in the infrastructure, energy, construction, real estate and environmental markets. The Company’s clients include the U.S. federal, state and local governments, and the private sector.

PRIMARY RISKS Ø An economic downturn could restrict the Company’s access to capital markets and slow acquisition-related growth.

Please refer to the end of this report to obtain important disclosure information.

c rh se a e R ar l u g n i S

Harsco Corporation (HSC)

Nov 20, 2018

The company announced third quarter results better than our expectations with revenue up 16% and adjusted EPS up 100%. HSC raised its full year FY18 adjusted EPS guidance and expects business momentum to continue in 2019 as well. We maintain our BUY rating and increase our target price to $33.00 per share.

Price (as of close on Nov 19, 2018)

$26.50 Rating

BUY

52-Week Range Shares Outstanding Insider/Institutional Public Float Market Capitalization

Price Target

$33.00

FYE DEC EPS ($)

Christopher J. Sakai, CFA 818-222-6234 research@singularresearch.com

FY 2017A ACTUAL

Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year* P/E Ratio Change FYE DEC Revenue ($ mil.)

$15.55 – $30.05 80.3 million 1.0% / 88.3% 79.6 million $2,240 million

$0.11A $0.22A $0.20A $0.20A $0.74A 37.8 53.2% FY 2017A ACTUAL

Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year* Change

$372.5A $394.9A $384.6A $454.9A $1,607.0A 10.7%

Total Debt Debt/Equity ROE (LTM) Book Value/Share Daily Volume (3 mo. Avg.)

FY 2018E CURRENT PREVIOUS

$0.22A $0.36A $0.40A $0.30E $1.28E 21.8x 73.0% $408.0A $431.9A $445.4A $492.5E $1,778.0E 10.6%

FY 2019E CURRENT PREVIOUS

$0.22A $0.36A $0.31A $0.32E $1.21E

FY 2018E CURRENT PREVIOUS

$408.0A $431.9A $424.6A $496.6E $1,761.2E

$625 mil 27.9% 38.4% $3.6 444,433

$0.27E $0.41E $0.41E $0.34E $1.43E 19.5x 12.1%

$0.26E $0.40E $0.40E $0.34E $1.41E

FY 2019E CURRENT PREVIOUS

$430.4E $455.9E $469.9E $518.9E $1,875.3E 5.5%

$430.4E $455.9E $448.9E $523.1E $1,858.5E

* Numbers may not add up due to rounding. * All numbers are non-GAAP.

Q3:18 Highlights Ø Ø

Equity Research

Ø Company Description Ø Harsco Corp is a diversified, multinational provider of industrial Ø services and engineered products.

The company's operations consist of three reportable segments: Harsco Ø Metals & Minerals, Harsco Industrial and Harsco Rail. The company has locations in 30 countries, including the United States.

Q3:18 revenue was $445 million, up 16% from Q3:17, largely attributable to revenue growth across all segments – Metals & Minerals (+5% YOY), Industrial (+20% YOY) and Rail (+62% YOY).

HSC delivered non-GAAP operating margin of 12.9%, compared to 11.9% in Q2:18 and 10.2% in Q3:17. Adjusted operating income increased 47% to $57.5 million.

The turnaround in the Rail segment continues to gain momentum. The Rail segment delivered its highest quarterly operating profit in many years due to strong shipments of equipment and parts.

Management noted that the backlog trend across all segments is positive which should provide a boost to revenue in FY19.

For the full year of 2018, management expects adjusted operating income to be between $185 million and $190 million, and adjusted EPS to be between $1.24 to $1.29.

We marginally adjust our estimates based on the results and management commentary. We maintain our BUY rating and increase our target price to $33.00, with an implied capital appreciation potential of 18%.

PRIMARY RISKS Ø A slowdown in global steel production and demand could adversely affect the M&M segment (HSC’s largest revenue contributor). Ø Difficulties from acquisition integration could adversely affect operating costs and expected benefits from those acquisitions.

Please refer to the end of this report to obtain important disclosure information.

c rh se a e R ar l u g n i S

Control4 Corporation (CTRL)

Nov 13, 2018

The company announced third quarter results in line with the expectations. CTRL marginally lowered its full year FY18 revenue guidance, while raised its EPS guidance. We maintain our BUY rating and lower our target price to $30.00 per share.

Price (as of close on Nov 12, 2018)

$22.61 Rating

52-Week Range Shares Outstanding Insider/Institutional Public Float Market Capitalization

BUY Price Target

$30.00

FYE DEC EPS ($)

FY 2017A ACTUAL

Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year* P/E Ratio Change

Chris Sakai, CFA 818-222-6234 research@singularresearch.com

FYE DEC Revenue ($ mil.)

$20.50 – $37.62 26.1 million 1.0% / 80.4% 26.4 million $656.5 million

$0.12A $0.32A $0.35A $0.40A $1.19A 20.6x 40.3% FY 2017A ACTUAL

Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year* Change

$50.2A $61.4A $64.7A $68.3A $244.7A 17.2%

Total Debt Debt/Equity ROE (LTM) Book Value/Share Daily Volume (3 mo. Avg.)

FY 2018E CURRENT PREVIOUS

$0.21A $0.42A $0.38A $0.43E $1.44E 17.1x 20.8%

$0.21A $0.42A $0.35E $0.42E $1.40E

FY 2018E CURRENT PREVIOUS

$59.1A $69.2A $71.6A $73.8E $273.8E 11.9%

$59.1A $69.2A $71.2E $73.8E $273.4E

$0.0 mil 0% 11.3% $6.5 559,596

FY 2019E CURRENT PREVIOUS

$0.24E $0.42E $0.40E $0.48E $1.54E 16.0x 6.9%

$0.24E $0.41E $0.39E $0.47E $1.51E

FY 2019E CURRENT PREVIOUS

$65.0E $76.1E $78.7E $81.2E $301.1E 10.0%

$65.0E $76.1E $78.3E $81.2E $300.7E

* Numbers may not add up due to rounding. * All numbers are non-GAAP.

Q3:18 Highlights Ø

Ø Ø Ø

Equity Research

Company Description Control4 is a leading provider of smart home and business solutions that are designed to personalize and enhance how consumers engage with an ever-changing connected world. Their products unlock the potential of connected devices, making entertainment systems easier to use and more accessible, homes and businesses more comfortable and energy efficient, and individuals more secure.

Ø Ø

Q3:18 revenues were $71.6 million, up 11% from Q3:17, largely attributable to revenue growth in both North America (+11% YOY) and international (+13% YOY) segment on account of new dealer additions as well as growth from existing dealers.

CTRL delivered non-GAAP gross margin of 53.2%, compared to 53.9% in Q2:18 and 52.6% in Q3:17.

The North American dealer network grew ~7% to 3,356 dealers in Q3:18. While number of international dealers grew ~14% to 1,462.

CA-1 controller saw significant traction in Q3:18 and the company expects the demand to remain robust in 2018.

For the full year of 2018, CTRL expects revenue to be between $272 million and $274 million, and non-GAAP net income to be between $39 million to $40 million.

We marginally adjust our estimates based on the results and management commentary. We maintain our BUY rating and lower our target price to $30.00, with an implied capital appreciation potential of 22%.

PRIMARY RISKS Ø Projected sales and earnings are dependent on economic growth in the Company’s target markets. Unexpected political or economic shocks could interrupt consumer spending in these regions. Ø Market is highly fragmented and competitive with presence of large established MNCs which have larger resources than CTRL.

Please refer to the end of this report to obtain important disclosure information.

Singular Research

Kulicke and Soffa Industries, Inc. (KLIC) August 24, 2018

The company beat our revenue and adjusted EPS estimate easily, as revenue surged in the equipment segment. We adjust our earnings estimates and maintain our BUY rating maintaining our price target at $31.20.

Price (as of close on August 23, 2018)

$25.59

52-Week Range Shares Outstanding Insider/Institutional Public Float Market Capitalization

Rating

BUY Price Target

$31.20

FYE SEP EPS ($)

FY 2017A ACTUAL

$0.22A $0.40A $0.62A $0.53A $1.77A 14.6x 128.9%

Q1 Dec Q2 Mar Q3 Jun Q4 Sep Year* P/E Ratio Change

Greg Eisen, CFA 818-222-6234 research@singularresearch.com

FYE SEP Revenue ($ mil.)

$18.22 – $28.71 67.6 million 1.4% / 88.3% 66.6 million $1,735 million

FY 2017A ACTUAL

Q1 Dec Q2 Mar Q3 Jun Q4 Sep Year* Change

$149.6A $199.6A $243.9A $215.9A $809.0A 29.0%

Total Debt Debt/Equity ROE (LTM)-Adjusted Book Value/Share Daily Volume (3 mo. Avg.)

FY 2018E CURRENT PREVIOUS

$0.53A $0.51A $0.86A $0.28E $2.18E 11.8x 11.0%

$213.7A $221.8A $268.8A $184.5E $888.8E 9.9%

FY 2019E CURRENT PREVIOUS

$0.53A $0.51A $0.57E $0.44E $2.05E

FY 2018E CURRENT PREVIOUS

$15.4 mil 1.8% 20.0% $12.55 760,826

$0.28E $0.59E $0.83E $0.55E $2.25E 11.5x 3.1%

$0.42E $0.43E $0.66E $0.57E $2.11E

FY 2019E CURRENT PREVIOUS

$213.7A $221.8A $256.2E $227.2E $918.9E

$184.1E $252.4E $292.4E $239.5E $968.4E 9.0%

$222.6E $230.7E $270.9E $253.2E $977.3E

* Numbers may not add up due to rounding. * EPS are Adjusted EPS excluding non-recurring charges.

Q3:18 Quarterly Highlights ➢ ➢ ➢ ➢ ➢

Equity Research

Company Description

➢ Kulicke & Soffa is a global leader in the design and manufacture of semiconductor, LED and electronic assembly equipment. In recent years, the company has expanded its product ➢ offerings through strategic acquisitions and organic development adding ➢ Advanced Packaging and a broader range of expendable tools to its core ball bonding product line.

Q3:18 revenues were $268.8 million, up 10.2% from Q3:17, on strong volume growth in the core business, offset some by weaker pricing.

Gross margin was 47.2%, up from 46.7% in the prior year. The margin came in higher than forecast due to less exposure this quarter to lower margin LED equipment, and a greater proportion of higher margin ball bonder equipment.

Operating profit margin rose to 24.0% of revenue in the quarter vs. 21.8% in the prior year, driven by the strong gross margin and a lower SG&A ratio.

Diluted Earnings per Share in Q3:18 was $0.86 vs. $0.68 (adjusted) in Q3:17.

Diluted share count was down 3.0% as the company has been buying back shares.

Management guided Q4:18 revenues in the $180 - $190 million range, compared to $215.9 million in the comparable prior year quarter.

We adjust our earnings estimates for FY:18 and FY:19 to $2.18 and $2.25 respectively, maintain our BUY rating while maintain our price target to $31.20.

PRIMARY RISKS The company operates in a highly cyclical business environment, which can result in prolonged periods of low demand.

The company is exposed to foreign currency risk, as it does most of its business outside United States. Further, it is exposed to potential risks from increased tariffs as the current trade war continues.

Please refer to the end of this report to obtain important disclosure information.

c h r se a e R ar l u g ni S

QuinStreet Inc. (QNST) Nov 8, 2018

The company announced better than expected revenue and adjusted EBITDA versus our estimates. We remain optimistic on QNST’s growth prospects amid investments in new products and media strategies. The ongoing shift from traditional to digital ad spending is a secular trend and will provide a significant tailwind to QNST. We maintain our BUY rating and increase our target price to $20.00 per share.

Price (as of close on Nov 7, 2018)

$17.48 Rating

BUY

52-Week Range Shares Outstanding Insider/Institutional Public Float Market Capitalization

Price Target

$20.00

FYE JUNE EPS ($)

Staff 818-222-6234 research@singularresearch.com

FY 2017A ACTUAL

Q1 Sep Q2 Dec Q3 Mar Q4 Jun Year* P/E Ratio Change FYE JUNE Revenue ($ mil.)

$8.24 – $17.52 49.1 million 11.4% / 87.6% 42.5 million $857.9 million

$0.01A $(0.04)A $0.06A $0.06A $0.11A 158.9x 569.1% FY 2017A ACTUAL

Q1 Sep Q2 Dec Q3 Mar Q4 Jun Year* Change

$73.4A $65.6A $79.2A $81.5A $299.8A 0.7%

Total Debt Debt/Equity ROE (LTM) Book Value/Share Daily Volume (3 mo. Avg.)

FY 2018A CURRENT PREVIOUS

$0.08A $0.07A $0.16A $0.13A $0.45A 38.6x 311.5%

$87.4A $87.5A $117.9A $111.5A $404.3A 34.9%

FY 2019E CURRENT PREVIOUS

$0.08A $0.07A $0.16A $0.14A $0.46A

FY 2018A CURRENT PREVIOUS

$87.4A $87.5A $117.9A $97.0A $389.8A

$0.0 mil 0.0% 6.5% $5.9 761,938

$0.14A $0.11E $0.18E $0.20E $0.63E 27.7x 39.4%

$0.10E $0.10E $0.21E $0.19E $0.61E

FY 2019E CURRENT PREVIOUS

$112.8A $106.7E $129.7E $127.1E $476.4E 17.8%

$102.3E $94.4E $129.7E $127.1E $453.6E

* Numbers may not add up due to rounding. * All numbers are non-GAAP.

Q1:19 Highlights ➢ ➢

➢ Company Description

QuinStreet Inc. specializes in performance marketing products and technologies.

The company serves clients in high-value, highconsideration market verticals, including financial services, IT / technology, home services and education.

➢ ➢ ➢

Q1:19 revenues were $112.9 million, up 29% from Q1:18, on account of strong performance across all business verticals.

The Financial services client vertical represented 69% of Q1:19 revenues and grew 32% YOY; the education client vertical represented 20% of Q1:19 revenues and grew 24% YOY; the home services vertical and B2B technology sector represented the remaining 11% of Q1:19 revenues and grew 22% YOY. Management sounded cautious regarding the Education vertical in the near term, though their long-term outlook remains optimistic.

Adjusted EBITDA in Q1:19 was $10.3 million vs. $6.5 million in Q1:18, an increase of ~56% YOY. Management expects FY 2019 revenue to be up at least 15 to 20% YOY and adjusted EBITDA margin to expand to ~10%.

We marginally adjust our estimates based on the quarter end results and management commentary. We maintain our BUY rating and increase our target price to $20.00, with an implied capital appreciation potential of 14%.

PRIMARY RISKS ➢ Client concentrations remain a key risk. A loss of a key client or a failure to renew a large contract could significantly impact financial results. ➢ A reduction in digital marketing spending due to an economic downturn could negatively impact earnings.

Please refer to the end of this report to obtain important disclosure information.

c rh se a e R ar l u g ni S

Transcat Inc. (TRNS)

November 15, 2018

Q2:19 results demonstrated solid performance by increasing profit margins and growing earnings. We maintain a BUY recommendation and lower our price target from $30.00 to $27.75.

Price (as of close on Nov 14, 2018)

$20.50

52-Week Range Shares Outstanding Insider/Institutional Public Float Market Capitalization

Rating

BUY Price Target

$27.75

FYE MAR EPS ($)

FY 2018A ACTUAL

Q1 June Q2 Sep Q3 Dec Q4 Mar Year* P/E Ratio Change

Christopher J. Sakai, CFA 818-222-6915 research@singularresearch.com

FYE MAR Revenue ($ mil.)

$12.20 – $25.35 7.2 million 11.8% / 61.7% 6.3 million $153.5 million

FY 2019E CURRENT PREVIOUS

$0.12A $0.11A $0.25A $0.33A $0.81A 26.3x 27.2% FY 2018A ACTUAL

Q1 June Q2 Sep Q3 Dec Q4 Mar Year* Change

$36.3A $35.9A $40.5A $42.4A $155.1A 7.8%

Total Debt Debt/Equity ROE (LTM) Book Value/Share Daily Volume (3 mo. Avg.)

$0.19A $0.20A $0.29E $0.39E $1.06E 20.0x 31.3% $36.7A $38.8A $44.3E $46.7E $166.7E 7.4%

FY 2020E CURRENT PREVIOUS

$0.19A $0.15A $0.26E $0.32E $0.92E

FY 2019E CURRENT PREVIOUS

$23.1 mil 15.0% 18.4% $7.3 20,715

$0.20E $0.21E $0.31E $0.42E $1.14E 18.6x 7.5%

$0.20E $0.15E $0.26E $0.35E $0.96E

FY 2020E CURRENT PREVIOUS

$36.7A $48.9A $54.9E $57.5E $197.7E

$39.2E $41.6E $47.4E $50.1E $178.5E 7.1%

$45.9E $45.5E $53.8E $54.8E $200.0E

* Numbers may not add up due to rounding. * All numbers are non-GAAP.

Q2:19 Highlights Ø

Ø Ø Ø Company Description

Equity Research

Transcat, Inc. (TRNS) is a leading provider of accredited calibration and laboratory instrument services and a value-added distributor of professional grade test, measurement and control instrumentation to highly regulated industries.

TRNS saw solid improvement in revenue, with both the Service and Distribution segments having margin expansion through operating leverage and the early impact from operational excellence initiatives. As a result of gross margin improvement and cost discipline, operating margin expanded by 150 bps and operating income grew 49% YOY to $2.1 million. Net income grew 90.5% YOY, resulting in an increase in diluted EPS from $0.11 in Q2:18 to $0.20 in Q2:19.

Service revenue increased 9.1% to $19.9 million, which was comprised of ~7.6% organic revenue growth. Higher revenue was the result of new business from the life sciences market and growth in the overall industrial manufacturing sector.

Distribution revenue grew 7.3% YOY to $18.9 million, reflecting higher demand from core industrial customers and rental revenue growth of ~15% to $1 million.

Management expects double-digit revenue growth for the Service segment, while the Distribution business is expected to record low to mid-single digit sales growth for F2019. The acquisition pipeline remains robust and operational excellence initiatives will continue to meaningfully ramp up margin in the near to medium term.

We maintain a BUY rating and lower our price target from $30.00 to $27.75.

PRIMARY RISKS Ø TRNS’s results can be negatively affected by volatility in the oil and gas industry, weak economic activity, timing of customer orders, foreign exchange fluctuations, and competitor pricing. Ø There are significant competitors in the firm's operating segments, including large multinational firms and TRNS may not have the resources to compete with them.

Please refer to the end of this report to obtain important disclosure information.

Singular Research

Olympic Steel Inc. (ZEUS) December 20, 2018

We remain optimistic on ZEUS’s growth prospects amid a robust U.S. industrial outlook, improving mix and strong order book. The continued investment in organic growth and opportunistic acquisitions provide topline optimism. We initiate with a BUY rating and a $22.25 price target.

Price (as of close on Dec 20, 2018)

$15.59 Rating

52-Week Range Shares Outstanding Insider/Institutional Public Float Market Capitalization

BUY 12- Month Target Price

$22.25

FYE Dec EPS ($)

Christopher J. Sakai, CFA 818-222-6234 research@singularresearch.com

$15.46 – $25.84 11.0 million 17.1%/67.8% 9.1 million $171.6 million

FY 2017A ESTIMATED

Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year* P/E Ratio Change

Total Debt Debt/Equity ROE (LTM) Book Value/Share Daily Volume (90-day)

FY 2018E CURRENT PREVIOUS

$0.68A $0.42A $0.20A $0.37A $1.67A 10.3x NM

$304.4M 99% 13.5% $26.9 53,740

FY 2019E CURRENT PREVIOUS

$0.67A $1.39A $1.01A $0.23E $3.30E 5.2x 97.9%

$0.60E $0.88E $0.47E $0.32E $2.27E 7.6x -33.7%

FYE Dec Revenue ($ mil.)

FY 2017A ACTUAL

FY 2018E CURRENT PREVIOUS

Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year* Change

$334.8A $356.2A $331.4A $308.1A $1,330.7A 26.1%

$375.6A $452.9A $456.9A $277.3E $1,562.8E 17.4%

-

FY 2019E CURRENT PREVIOUS

$361.8E $499.0E $463.2E $286.8E $1,601.9E 3.1%

-

* Numbers may not add up due to rounding.

Investment Thesis Olympic Steel is a leading U.S. metals service center focused on the direct sale and distribution of large volumes of processed carbon, coated and stainless flat-rolled sheet, coil and plate steel, aluminum, tin, pipe and tubular products.

➢

➢

➢

➢

In our view, a robust U.S. industrial recovery will continue to provide a significant tailwind to ZEUS. In 1H18, all three operating segments generated double-digit top line growth and strong operating income.

A shift to higher value-added products and the ongoing operational efficiency program are likely to improve margins. The expansion of the Schaumburg facility and the acquisition of Berlin Metals in April 2018 will further strengthen ZEUS’ product portfolio in the higher dollar margin specialty metals segment.

Management further stated that they continue to remain bullish in their third quarter outlook and for the remainder of 2018. The order book remains solid with visibility well into the fourth quarter driven by strong demand from original equipment manufacturers (OEMs).

The company is poised to grow revenues and earnings over the near to medium term. We initiate coverage with a BUY rating and a price target of $22.25.

Equity Research

PRIMARY RISKS ➢

The company’s sales and earnings are highly dependent on steel prices and any decline in prices could negatively affect operating results.

➢ The company faces risks stemming from a heightened U.S.-China trade war.

Any further escalation could weaken the results.

Please refer to the end of this report to obtain important disclosure information.

Singular Research

Harvard Bioscience (HBIO)

November 6, 2018

HBIO delivers 15% YOY revenue growth and 33% gain in non-GAAP EPS. The recently acquired DSI business was the primary contributor to sales growth, with DSI sales up 19% YOY. We reiterate our BUY rating and $6.50 target price.

Price (as of close on November 5, 2018)

$4.06

52-Week Range Shares Outstanding Insider/Institutional Public Float Market Capitalization

Rating

BUY 12- Month Target Price

$6.50

FYE DEC EPS* ($)

FY 2017A ACTUAL

Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year* P/E Ratio Change

Lisa Springer 818-222-6234 research@singularresearch.com

$0.02A $0.03A $0.03A $0.05A $0.12A 33.8x

FYE DEC Revenue ($ mil.)

Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year* Change

$2.95 – $6.70 37.3 million 13% /76% 32.0 million $152.9 million

FY 2017A ACTUAL

$24.2A $25.2A $25.1A $27.5A $101.9A

LT Debt (millions) Debt/Equity ROE (LTM) Book Value/Share Daily Volume

FY 2018E CURRENT PREVIOUS

$0.03A $0.07A $.0.04A $0.07E $0.20E 20.3x 67%

$27.7A $31.5A $28.6A $32.0E $120.0E 18%

FY 2019E CURRENT PREVIOUS

$0.03A $0.07A $0.04E $0.07E $0.20E

FY 2018E CURRENT PREVIOUS

$59.3 73% 8.7% $2.19 221.0k

$0.04E $0.10E $0.06E $0.10E $0.29E 14.0x 45%

$0.01E $0.08E $0.05E $0.09E $0.23E

FY 2019E CURRENT PREVIOUS

$27.7A $31.5A $$29.6E $33.0E $120.8E -

$28.5E $32.5E $29.5E $33.0E $123.5E 3%

$27.6E $32.5E $30.0E $33.9E $124.5E -

* Non-GAAP EPS. Numbers may not add up due to rounding.

Q3:18 Highlights Ø

Ø

Equity Research

Company Description

Harvard Bioscience (HBIO) develops, manufactures and markets scientific equipment, systems and consumables that are used by thousands of researchers worldwide. The Company was founded in 1901 by a Harvard Medical School professor and has grown through a combination of new products and acquisitions.

HBIO is headquartered in Holliston, Massachusetts and has sales and/or manufacturing operations in the US and Canada, the UK, Germany, Sweden France, Spain and China.

Ø Ø

Ø

Ø

GAAP revenues improve 53% YOY. Non-GAAP revenues, which include revenues generated by the divested Denville business, improved 15% YOY. The acquired DSI business was the primary growth driver. Ex DSI, organic sales declined 6% YOY. The electrophysiology business was the main reason for the organic sales decline, which HBIO attributed to timing-related issues, with some anticipated Q3 orders rolling instead into Q4, and some customers who have in the past ordered through the electrophysiology segment placing their orders instead through DSI. Reflecting the contribution from higher margin DSI products, non-GAAP gross margins rose 920 basis points YOY from 46.6% to 55.8%. This is in-line with HBIO’s non-GAAP gross margin target of 54% to 57%.

DSI contributed approximately $11.2 million or 39% of Q3:18 revenues. The DSI business, which was acquired in January, improves the diversification of HBIO’s customer base, contributes higher margin products and is expected to deliver between $2.5 million and $3.5 million of combined top-and-bottom-line synergies.

HBO launched product line extensions within its BTX and Harvard Apparatus brands and new DSI software enhancements during Q3. Several new electrophysiology products are scheduled to launch at the Society for Neuroscience annual meeting in November. This is HBIO’s largest industry trade show.

We reiterate our BUY rating and target price of $6.50.

PRIMARY RISKS Ø Ø

HBIO is a small player in an industry dominated by large global companies.

The Company derives approximately 40% of revenues from outside the US and is affected by foreign currency fluctuations.

Please refer to the end of this report to obtain important disclosure information.

c h r se a e R ar l u g n i S

Daktronics, Inc. (DAKT) December 10, 2018

DAKT reported better than expected Q2:19 revenues and EPS. We rate these shares Buy and maintain our $10 target price.

Price (as of close on Dec 7, 2018)

52-Week Range Shares Outstanding Insider/Institutional Public Float Market Capitalization

$8.25 Rating

BUY

FYE APR EPS ($)

Price Target

FY 2018A ACTUAL

$0.19A $0.16A ($0.14)A ($0.09)A $0.12A 67.1x -46.6%

Q1 Jul Q2 Oct Q3 Jan Q4 Apr Year P/E Ratio Change (%)

$10.00 Lisa Springer 818-222-6234 research@singularresearch.com

FYE APR Revenue ($ mil.)

$7.14 – $10.11 44.9 million 18.5% / 56.7% 36.8 million $375.5 million

FY 2018A ACTUAL

Q1 Jul Q2 Oct Q3 Jan Q4 Apr Year* Change

$172.7A $169.3A $130.3A $138.2A $610.5A 4.1%

Total Debt Debt/Equity ROE (LTM) Book Value/Share Daily Volume (3 mo. Avg.)

FY 2019E CURRENT PREVIOUS

$0.10A $0.19A ($0.04)E ($0.00)E $0.25E 33.2x 101.6%

$154.2A $172.7A $129.6E $149.2E $605.7E -0.8%

FY 2020E CURRENT PREVIOUS

$0.10A $0.19E ($0.05)E ($0.01)E $0.24E

FY 2019E CURRENT PREVIOUS

$15.7 mil 4.2% 5.1% $4.5 151,542

$0.14E $0.24E ($0.03)E $0.01E $0.36E 23.3x 42.6%

$0.10E $0.23E ($0.02)E $0.02E $0.34E

FY 2020E CURRENT PREVIOUS

$154.2A $169.5E $145.9E $149.2E $618.8E

$161.9E $181.3E $136.1E $156.6E $636.0E 5.0%

$161.9E $177.9E $153.2E $156.6E $649.7E

* Numbers may not add up due to rounding.

Q2:19 Highlights 

     Company Description

Equity Research

Daktronics, Inc. is the world’s leading supplier of electronic scoreboards, large electronic display systems, and digital messaging solutions for use in sports, transportation, and communications.

Q2:19 revenues were $172.7 million, up 2% YOY as a result of good performances across the Commercial (+34.0% YOY), Transportation (+9.7% YOY), High School & Recreation (+6.5% YOY) and International (+8.6% YOY) business units. DAKT ended the quarter with a backlog up 6.4% YOY to $151 million.

Q2:19 gross margins dropped 40 basis points to 24.8% from 25.2% in Q2:18 primarily due to higher commodity costs.

Overall orders rose 6.4% and increased in the Commercial, High School Park and Recreation and Transportation business units. Orders fell in the Live Events and International business units.

EPS improved 19% YOY to $0.19 in Q2:19 from $0.16 in Q2:18.

Management expects modest sales declines in Q3:19, causing us to reduce our Q3:19 EPS estimate.

Management’s favorable comments regarding DAKT’s longer-term outlook are reflected in our increased FY:20 EPS estimates. We rate these shares a Buy, and reiterate our $10 target price, which implies capital appreciation potential of approximately 20%.

PRIMARY RISKS  DAKT’s results can be negatively impacted by weak economic activity; rising commodity input costs; timing of customer orders; foreign exchange fluctuations; and competitor pricing  There are significant competitors in many of the firm's operating segments, including large multi-nationals such as Mitsubishi and Panasonic, and DAKT may lack resources to compete effectively.

Please refer to the end of this report to obtain important disclosure information.