ESWW: A $7M Mkt Co Trading at 1x EBITDA Substantially Growing Revs and EBITDA

On a dreary overcast day in NY, there's nothing like a new stock idea to get me excited. Found this company ...

http://finance.yahoo.com/q?s=esww

... while running a screen for small cap companies growing revenues and margins and with net cash representing a significant portion of MktCap.

Environmental Solutions Worldwide (ticker ESWW) makes emissions control retrofits for medium and heavy duty diesel (MHDD) trucks, both on and off-road.

The overall market for on/off road trucks benefits from increased pollution control regulations by state and federal EPA. The trend towards increased pollution control regulations are well documented here ...

http://www.arb.ca.gov/msprog/mailouts/msc1325/msc1325.pdf
http://www.dieselnet.com/news/2013/08meca.php
http://www.dieselnet.com/standards/us/ld_t3.php

The company has a market cap of roughly $7M.
In 2013 it did $17.5M in sales and was breakeven.
In 1Q14 it did $7M in sales and $1.9M in EBITDA.

It trades at 0.3x annual sales, 1x EBITDA and has a pedigreed board of directors including what appears to be two of Leon Black's kids. Unless he's Cronos-like who ate his children, why would he saddle his kids with a crappy company?

The Apollo connection isn't just in the board of directors but how the company operates. Much of the growth in sales corresponds to its "stalking horse" acquisition of Cleaire out of bankruptcy auction in 2013 for $1.4M.

There are only 125,000 shares outstanding (yes, thousand) and the company is authorized to issue up to 250M, which simply reflects the recent 1:2,000 reverse stock split and re-listing without terminating shares.

Also, the bulk of the $2.5M in l/t debt is in the form of convertible notes that would be dilutive. But the opportunities I see in buying a profitable cash flow positive company in a regulated growth market offsets my fears of dilution to shareholders, especially since it seems at least that everyone's goals are aligned towards long term growth and profitability.

I haven't nearly done as much work on this as a normally do and I will write more on this later, but the world cup is starting and I need to prepare dinner for my staving kids. Such are the travails of the outofworkanalyst.

Disclosure: I own 200 shares that I acquired today.