Could Tim Hortons’ Bright Idea Affect Revolution Lighting Technologies?

Tim Hortons is going green on lighting. Any good news for the industry is good for Revolution Lighting Technologies.

Apr 29, 2014 at 11:46AM

I've been critical of LED lighting company Revolution Lighting Technologies (NASDAQ:RVLT) before, especially with its missed guidance and communications. However, the company and its initiatives are fascinating, are potentially quite lucrative, and I hope it does well.

I was pleasantly surprised when I saw that Tim Hortons (NYSE:THI), another company that I like to write about, is investing heavily into LED lighting for its stores. While the company it partnered with isn't Revolution Light Technologies, any new interest from large companies like Tim Hortons is good for all players in the industry.

Source:  Revolution Lighting Technologies

Timmy's bright idea
Like a light bulb above Tim Hortons' head, the company had a great idea to announce on Earth Day, April 22. The company stated that it will replace existing light fixtures in restaurants that it renovates across the United States and Canada as part of a "commitment to environmental sustainability and promoting green building practices." All new restaurants as well will get the LED lighting as well.

Tim Hortons didn't go with Revolution Lighting Technologies on the deal and instead went with "the global leader in lighting." However, the more that businesses in general use LED lighting, the greater the chances are that smaller players like Revolution Lighting Technologies will score some deals of their own. There are tens of thousands of coffee and pastry locations that may be tempted to follow what Tim Hortons is doing. For example Starbucks, the world's largest coffee shop chain, has already been converting its lighting for several years.

Timmy sees the light
Tim Hortons plans to outfit 485 of its restaurants in 2014 alone. The company expects the lighting to use 40% less power and save 6.4 million kilowatt hours in energy. As a bonus, the lighting is expected to be better for customers by improving the light quality and guest experience. We all know some people like to just relax, read a book, use their laptops, or even just chat in places like Tim Hortons, so anything it can do to improve the experience could go a long way.

Tim Hortons had been struggling with semi-lackluster results until last quarter. It then reported a revenue pop of 4.3%, same-store sales gains of 1.6% in Canada and 3.1% in the U.S., and earnings per share that bumped up 6.2% to $0.69. In its conference call, CEO Marc Caira stated that the company was looking to "refresh" its restaurants and "provide the ultimate guest experience." LED lighting is a great start.

LED industry set to explode
Tim Hortons has seen the light. Others should continue to follow, and that will help Revolution Lighting Technologies. According to a research report by, the LED market was just $4.8 billion in 2012. It expects the market to rise 45% a year through 2019 to $42 billion for a total of 775% growth. If Revolution Lighting can grow at even half the industry rate, it could reward shareholders handsomely.

Meanwhile, the Department of Energy forecasts that by the year 2020, 36% of "lumen-hour sales on the general illumination market" will be composed of LED lighting. It expects that to rise to whopping 74% by 2030 and save businesses, people, and governments $30 billion in that single year alone. The massive surge in expected opportunity is going to require a lot of help from different competitors in the industry such as Revolution Lighting Technologies.

Foolish final thoughts
The news doesn't change Tim Hortons' valuation very much in the short term, but it's hard to imagine that it would hurt in the long term. If it can score happier customers and higher sales while saving a few bucks on the electric bill then all the better. Companies such as Tim Hortons may had felt a wakeup call when it comes to utility bills after the brutally cold winter that was recently felt across North America.

As for Revolution Lighting Technologies' valuation, Fools may want to wait on the sidelines. Although the industry is exploding around it, Revolution Lighting Technologies has a history of net losses and missed guidance. Once it turns profitable as reported in an earnings report then you may have to pay a premium, but there should still be plenty of upside from there. 

3 stock picks to ride America's energy bonanza
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a look at three energy companies using a small IRS "loophole" to help line investor pockets. Learn this strategy, and the energy companies taking advantage, in our special report "The IRS Is Daring You To Make This Energy Investment." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

Nickey Friedman 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers