The numbers tell that Hardwoods Distribution Inc's growth is outstanding
02.04.2015 • About Hardwoods Distribution Inc (
$HWD) • By InTwits
Hardwoods Distribution Inc is a fast-growing stock in Consumer, Cyclical industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Hardwoods Distribution Inc showed fast growth in the last financial year. Hardwoods Distribution Inc's revenue surged on 22.8% in FY2014. EBITDA also increased considerably: 19.2% for the same period.
If we look for the longer period the company showed fast revenue growth of 25.6% from 2011 to 2014 annually. EBITDA surged on 62.2% from 2011 to 2014 annually.
Hardwoods Distribution Inc ($HWD) financials for the last 5 years
| mln. CAD | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 198 | 230 | 306 | 371 | 456 |
|---|
| Revenue growth, % | | 16.4% | 33.1% | 21.3% | 22.8% |
|---|
| Gross margin, % | 17.4% | 17.7% | 17.6% | 18.2% | 17.3% |
|---|
| SG&A, % | 12.3% | 12.0% | 11.1% | 10.4% | 9.53% |
|---|
| EBITDA | 4 | 6 | 12 | 21 | 25 |
|---|
| EBITDA growth, % | | 36.6% | 106.9% | 73.1% | 19.2% |
|---|
| EBITDA margin, % | 2.21% | 2.60% | 4.03% | 5.76% | 5.59% |
|---|
| Net Income | 1 | 6 | 6 | 13 | 14 |
|---|
| Net Income margin, % | 0.474% | 2.64% | 2.02% | 3.52% | 3.08% |
|---|
| |
| CAPEX | 0 | 0 | 1 | 1 | 2 |
|---|
| CAPEX/Revenue, % | 0.0536% | 0.165% | 0.277% | 0.254% | 0.331% |
|---|
| Debt | 8 | 21 | 26 | 30 | 37 |
|---|
| Cash | 0 | 0 | 0 | 0 | 0 |
|---|
| Net Debt/EBITDA | 1.9x | 3.5x | 2.1x | 1.4x | 1.5x |
|---|
| |
| ROIC, % | | | 13.1% | 19.9% | 18.8% |
|---|
| ROE, % | | | 8.4% | 15.7% | 14.1% |
|---|
Profitability and return on investment
EBITDA margin declined slightly from 5.80% in FY2013 to 5.60% in FY2014. In the last 3 years the company's EBITDA margin surged on 3 pp from 2.60% in 2011 to 5.60% in 2014.
We call Hardwoods Distribution Inc an attractive growth stock as together with the growth it delivers high ROIC at 18.8%. Three years ago it was considerably lower at . For the last three years the average ROIC was 17.3%.
Hardwoods Distribution Inc's Net Income margin dropped on 0.400 pp from 3.50% to 3.10% in 2014. If we look for the longer period Net Income margin surged on 0.500 pp from 2.60% in 2011 to 3.10% in 2014.
Hardwoods Distribution Inc operates at ROE of 14.1%. It's average level of ROE for the last three years was 12.7%.
Capital expenditures (CAPEX)
The company's CAPEX/Revenue was 0.331% in FY2014. CAPEX/Revenue surged on 0.166 pp from 0.165% in 2011 to 0.331% in 2014. Average CAPEX/Revenue for the last three years was 0.287%.
Leverage (Debt)
Having such a fast growth profile Hardwoods Distribution Inc keeps medium debt level at 1.5x Net Debt/EBITDA. In the last 3 years leverage dropped on 2.03x from 3.48x in 2011 to 1.46x in 2014.
Valuation vs. comparable companies
The market closed today at 9.6x EV/EBITDA for Hardwoods Distribution Inc which is 41.1% lower than 16.3x Consumer, Cyclical peer group avearge calculated on the basis of 111 companies. The market closed today at 14.8x P/E for Hardwoods Distribution Inc which is 41.6% lower than 25.4x Consumer, Cyclical peer group avearge calculated on the basis of 32 companies.
Peers in Consumer, Cyclical
Below you can find Hardwoods Distribution Inc benchmarking vs. other companies in Consumer, Cyclical industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Partner Jet Corp ($PJT) | | -19.9% | -15.2% | 1.2% | 119.7% |
| Kelso Technologies Inc ($KLS) | | 80.5% | 577.5% | 487.8% | 81.4% |
| Holloway Lodging Corp ($HLC) | | 5.4% | -24.6% | 2.7% | 62.7% |
| AutoCanada Inc ($ACQ) | | 16.1% | 9.2% | 27.9% | 57.2% |
| New Look Vision Group Inc ($BCI) | | 13.3% | 2.6% | 10.5% | 54.2% |
| |
|---|
| Median (60 companies) | | 7.1% | 5.3% | 4.6% | 5.8% |
|---|
| Hardwoods Distribution Inc ($HWD) | | 16.4% | 33.1% | 21.3% | 22.8% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Restaurant Brands International Inc ($QSR) | | | | 69.7% | 87.0% |
| Imvescor Restaurant Group Inc ($IRG) | 95.5% | 96.2% | 94.2% | 89.7% | 84.9% |
| DEQ Systems Corp ($DEQ) | 79.1% | 74.3% | 77.5% | 78.4% | 84.7% |
| Second Cup Ltd/The ($SCU) | 89.6% | 91.1% | 86.6% | 85.1% | 72.7% |
| New Look Vision Group Inc ($BCI) | 70.4% | 72.3% | 71.8% | 72.6% | 72.6% |
| |
|---|
| Median (54 companies) | 28.1% | 36.1% | 35.3% | 33.8% | 35.4% |
|---|
| Hardwoods Distribution Inc ($HWD) | 17.4% | 17.7% | 17.6% | 18.2% | 17.3% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Westshore Terminals Investment Corp ($WTE) | | | 49.7% | 65.9% | 60.9% |
| Gamehost Inc ($GH) | 44.4% | 44.2% | 46.1% | 45.7% | 45.9% |
| Great Canadian Gaming Corp ($GC) | 20.6% | 34.1% | 16.8% | 41.1% | 40.1% |
| MTY Food Group Inc ($MTY) | 38.6% | 32.2% | 36.3% | 38.7% | 37.0% |
| Whistler Blackcomb Holdings Inc ($WB) | 27.3% | 34.8% | 36.0% | 35.9% | 36.4% |
| |
|---|
| Median (57 companies) | 9.7% | 9.5% | 9.2% | 10.2% | 10.2% |
|---|
| Hardwoods Distribution Inc ($HWD) | 2.2% | 2.6% | 4.0% | 5.8% | 5.6% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| WestJet Airlines Ltd ($WJA) | 1.9% | 3.9% | 7.9% | 19.5% | 18.6% |
| Exchange Income Corp ($EIF) | 23.9% | 8.2% | 7.9% | 15.8% | 15.5% |
| Holloway Lodging Corp ($HLC) | 4.9% | 3.4% | 8.2% | 6.7% | 14.8% |
| Kelso Technologies Inc ($KLS) | 0.0% | 79.2% | 0.4% | 0.7% | 13.5% |
| Gildan Activewear Inc ($GIL) | 9.7% | 9.0% | 3.7% | 7.4% | 12.1% |
| |
|---|
| Median (60 companies) | 1.9% | 2.9% | 2.7% | 2.7% | 2.2% |
|---|
| Hardwoods Distribution Inc ($HWD) | 0.1% | 0.2% | 0.3% | 0.3% | 0.3% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Partner Jet Corp ($PJT) | 4.9% | -30.7% | -51.6% | -50.8% | 85.1% |
| Kelso Technologies Inc ($KLS) | | -121.3% | | | 48.8% |
| Westshore Terminals Investment Corp ($WTE) | | | 24.0% | 37.8% | 35.0% |
| Iplayco Corp Ltd ($IPC) | -11.7% | -35.4% | 23.0% | 58.5% | 33.6% |
| BRP Inc/CA ($DOO) | | | 29.8% | 26.8% | 32.3% |
| |
|---|
| Median (60 companies) | 11.8% | 10.9% | 10.5% | 11.8% | 10.1% |
|---|
| Hardwoods Distribution Inc ($HWD) | | | 13.1% | 19.9% | 18.8% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Restaurant Brands International Inc ($QSR) | | | | 3.8x | 33.6x |
| Hudson's Bay Co ($HBC) | 0.0x | 8.7x | 3.8x | 3.6x | 19.1x |
| Dorel Industries Inc ($DII.A) | 1.6x | 1.6x | 1.5x | 2.8x | 12.2x |
| Performance Sports Group Ltd ($PSG) | | | 2.6x | 3.5x | 12.2x |
| Taiga Building Products Ltd ($TBL) | 2.8x | 7.5x | 7.7x | 7.2x | 8.6x |
| |
|---|
| Median (52 companies) | 0.8x | 1.3x | 1.2x | 1.8x | 1.8x |
|---|
| Hardwoods Distribution Inc ($HWD) | 1.9x | 3.5x | 2.1x | 1.4x | 1.5x |
