Alpine 4 Technologies Inc (OTCQB:ALPP) CEO Kent Wilson released his annual letter to shareholders on Tuesday, issuing revenue guidance between $42 million and $55 million for 2021.
That number doesn’t factor in potential acquisitions, Wilson said, and the company could exceed it if COVID-19 doesn't inflict market-inhibiting barriers like it did in 2020. The bulk of this revenue is expected to occur in the second and third quarters, as there is a significant backlog of work from 2020.
For 2020, Alpine said it saw revenue grow at least 19% to $33.5 million despite the impact of the coronavirus. The company's ability to drive net profit to the bottom line was exacerbated by the constraints of delayed contracts, customers halting sales in the US market and shelter in place orders, WIlson said.
READ: Alpine 4 Technologies says QCA subsidiary has already booked $1.5 million in new work with just its electric vehicle customers for Q1 2021
Alpine acquired multiple assets in 2020 and told shareholders to expect more moves in 2021.
“In 2020 we closed on three businesses — technically two, but I am considering the Vayu acquisition [which ultimately closed earlier this month] to have occurred in 2020,” Wilson wrote. “Based on where we are today, I believe we will acquire between 2 to 3 additional companies. These potential subsidiaries would be crucial additions in rounding out the A4 Construction Services, A4 Manufacturing and A4 Aerospace holdings. Based on the current size of Alpine 4, we are conducting due diligence on acquisitions that could add an additional $25 million to $40 million in annualized revenue.”
The company’s acquisition of Impossible Aerospace Corporation (IA) has garnered global attention, Wilson said, expanding its base of shareholders to more than 24,000 shareholders in Europe and a growing number of shareholders in Asia and beyond.
“Starting in February, new international initiatives will begin to take hold with our soon to be formed holding company, A4 Aerospace Inc,” Wilson wrote. “This will be the holding subsidiary for Impossible Aerospace and Vayu US Inc. Vayu's G1 and G2 [drone] platforms are paving the way to be the undisputed world leader in its field for range and payload... IA's next generation drones will also be marketed to the US Department of Defense and our allies worldwide.”
Phoenix-based Alpine 4 is driven by an acquisition model Wilson calls DSF, or driver, stabilizer, facilitator.
“DSF is a motto I coined during my years of corporate turnarounds for consulting firms and private equity groups,” Wilson wrote. “It described the characteristics I found that existed in successful generational businesses. Drivers are exciting new companies with large upside potential for market share and revenue generation. Stabilizers are companies with sticky customers, consistent revenue and solid net profits. Facilitators are companies with synergistic relevance to the other portfolio companies and whose product and/or service give a sister company a competitive advantage.”
By creating a balance of the three, Wilson believes Alpine 4 is positioned to grow.
“Quality Circuit Assembly and American Precision Fabricators (now QCA Central) allowed us to acquire a robust customer base and the ability to facilitate innovation” Wilson wrote. “We purchased Morris Sheet Metal Inc, Deluxe Sheet Metal Inc and Excel Fabrication LLC to add stability... Then we added driver companies, Impossible Aerospace Corporation and Vayu Inc, creating the visibility and exposure of Alpine 4 to take off, as well an explosion in market cap. Imagine what Alpine 4 and our stock price will look like when we are generating $50 million, $100 million or $500 million in revenue and we announce a new driver company. This is the power of DSF and we are just getting started!”
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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