Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis. 

What: Shares of Revolution Lighting Technologies (NASDAQ:RVLT) gained 10% last week following two major announcements from the LED lighting solutions company.

So what: Revolution kicked off the week with a bang, as shares jumped as much as 25% in early trading on March 10 after the company announced the acquisition of Georgia-based lighting solutions company Value Lighting and select affiliates for $7.5 million in cash and $28.1 million in stock.

The euphoria didn't last long, though: Revolution shares soon cooled, only to spike again Thursday after the company released its fourth-quarter and full-year numbers. Revolution's fourth-quarter revenue jumped a massive 610% year over year. However, that growth can't really be validated since the company didn't file its fourth-quarter-earnings report in 2012; instead, it delivered only the annual report for the full year. More important, Revolution's fourth-quarter net loss more than doubled to $3.3 million year over year.

Now what: Revolution's top line is growing at an accelerating pace. Full-year 2013 revenue surged to $26.1 million from just about $4.5 million for 2012. It was a significant year for the company in terms of growth, as Revolution acquired more than three companies and bagged big orders from clients including the U.S. Navy and New York City's largest commercial property company, SL Green Realty.

Value Lighting should be a good addition as well, especially since it will enable Revolution to gain traction in the rapidly growing multifamily construction segment which includes condominiums and apartments. According to an IBISWorld report, the multifamily construction market grew at an annual clip of 9% between 2009 and 2013, and is expected to grow further over the next five years.

The problem is that none of those growth opportunities can convert into profit as long as Revolution's costs remain high. Despite the big revenue growth, Revolution's net loss for 2013 nearly doubled to $16.8 million, thanks to one-time charges of $7 million from acquisitions and shifting its corporate office. Ideally, in the absence of those additional charges and backed by solid top-line growth, I'd expect Revolution to turn a profit in 2014. But I have my reservations, since the company's administrative expenses remain high.

Moreover, since Revolution ended 2013 with a cash balance of only $1.8 million, it will likely raise debt to fund the cash part of its $7.5 million for its Value Lighting acquisition. That will mean higher interest expenses, and thus greater pressure on Revolution's bottom line.

Otherwise, with Revolution projecting to end financial year 2014 with a whopping $110 million in revenue (assuming $55 million in revenue from Value Lighting), investors have good reasons to remain excited. I hope Revolution doesn't end up yet again with big "one-time charges" on this acquisition that could pull the company a step further away from profitability.

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Neha Chamaria has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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