DragonWave Inc revenue surged on 75.3% in 2015
12.05.2015 • About DragonWave Inc (
$DWI) • By InTwits
DragonWave Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- DragonWave Inc doesn't have a profitable business model yet: FY2015 ROIC is -33.3%
- DragonWave Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 was 0.0%. On average EBITDA Margin was -21.1% for the sames years0
- DragonWave Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's a lot of higher than industry average of 29.0%.
- CAPEX is quite volatile: 3.5 in FY2015, 1 in FY2014, 2.4 in FY2013, 1.1 in FY2012, 3.8 in FY2011
- The company has unprofitable business model: ROIC is at -33.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.2x while industry average is 2.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
DragonWave Inc ($DWI) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 118.0 | 45.7 | 123.9 | 90.0 | 157.8 | 75.3% |
| Gross Profit | 50.6 | 16.4 | 19.5 | 10.7 | 28.0 | 162.5% |
| SG&A | | 33.0 | 42.7 | 30.3 | 30.9 | 2.0% |
| EBITDA | 6.6 | -33.2 | -51.3 | -34.9 | | -100.0% |
| Net Income | 2.0 | -33.5 | -54.7 | -34.2 | -21.5 | -37.2% |
Balance Sheet
|
|---|
| Cash | 77.8 | 52.8 | 23.0 | 19.0 | 23.7 | 24.7% |
| Short Term Debt | 0.0 | 0.0 | 18.3 | 1.8 | 0.5 | -71.4% |
| Long Term Debt | 0.0 | 0.0 | 1.5 | 0.0 | 32.4 | |
Cash flow
|
|---|
| Capex | 3.8 | 1.1 | 2.4 | 1.0 | 3.5 | 247.4% |
Ratios
|
|---|
| Revenue growth | -17.3% | -61.3% | 171.3% | -27.3% | 75.3% | |
| EBITDA growth | -77.3% | -604.2% | 54.7% | -32.0% | | |
| Gross Margin | 42.8% | 35.9% | 15.7% | 11.8% | 17.7% | 5.9% |
| EBITDA Margin | 5.6% | -72.7% | -41.4% | -38.8% | 0.0% | 38.8% |
| Net Income Margin | 1.7% | -73.3% | -44.2% | -38.0% | -13.6% | 24.4% |
| SG&A, % of revenue | | 72.2% | 34.5% | 33.6% | 19.6% | -14.1% |
| CAPEX, % of revenue | 3.3% | 2.4% | 1.9% | 1.1% | 2.2% | 1.1% |
| ROIC | 2.1% | -33.1% | -69.7% | -71.7% | -33.3% | 38.4% |
| ROE | 1.5% | -28.6% | -69.6% | -70.5% | -50.4% | 20.1% |
| Net Debt/EBITDA | -11.8x | | | | | 0.0x |
Revenue and profitability
The company's Revenue surged on 75.3% in FY2015.
Gross Margin increased on 5.9 pp from 11.8% to 17.7% in FY2015. SG&A as a % of Revenue dropped on 14.1 pp from 33.6% to 19.6% in FY2015.
Net Income marign jumped on 24.4 pp from -38.0% to -13.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 DragonWave Inc had CAPEX/Revenue of 2.2%. DragonWave Inc's CAPEX/Revenue showed almost no change from FY2012 to FY2015. It's average level of CAPEX/Revenue for the last three years was 1.7%.
Return on investment
The company operates at negative ROIC (-33.27%) and ROE (-50.44%). ROIC surged on 38.4 pp from -71.7% to -33.3% in FY2015. ROE surged on 20.1 pp from -70.5% to -50.4% in FY2015.
Leverage (Debt)
Debt surged on 1,734% in FY2015 while cash jumped on 24.7% in FY2015.
Appendix 1: Peers in Communications
Below you can find DragonWave Inc benchmarking vs. other companies in Communications 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Telehop Communications Inc ($HOP) | -11.7% | -13.1% | -7.8% | 105.7% | |
| Wi2Wi Corp ($YTY) | | | 11.5% | 100.3% | |
| BSM Technologies Inc ($GPS) | | | 39.1% | 55.5% | |
| Plaintree Systems Inc ($NPT) | 20.1% | 14.5% | 9.1% | 50.8% | |
| Aimia Inc ($AIM) | 2.9% | 6.3% | -25.6% | 47.5% | |
| |
|---|
| Median (49 companies) | 7.5% | 5.0% | 1.8% | 3.1% | 403.1% |
|---|
| DragonWave Inc ($DWI) | | -61.3% | 171.3% | -27.3% | 75.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanted Technologies Corp ($WAN) | 86.6% | 90.5% | 93.2% | 94.3% | |
| CounterPath Corp ($CCV) | 74.1% | 80.0% | 85.1% | 80.9% | |
| Mediagrif Interactive Technologies Inc ($MDF) | 78.2% | 79.8% | 79.8% | 78.8% | |
| NeuLion Inc ($NLN) | 45.2% | 53.6% | 63.8% | 70.2% | |
| Sangoma Technologies Corp ($STC) | 74.5% | 68.8% | | 66.9% | |
| |
|---|
| Median (40 companies) | 43.3% | 43.3% | 42.7% | 42.5% | 46.4% |
|---|
| DragonWave Inc ($DWI) | 42.8% | 35.9% | 15.7% | 11.8% | 17.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Manitoba Telecom Services Inc ($MBT) | 33.7% | 34.3% | 33.7% | 47.4% | |
| Cogeco Cable Inc ($CCA) | 45.8% | 46.0% | 44.9% | 43.8% | |
| Cogeco Inc ($CGO) | 28.1% | 43.2% | 43.5% | 43.3% | |
| Shaw Communications Inc ($SJR.B) | 43.3% | 42.7% | 43.3% | 42.1% | |
| BCE Inc ($BCE) | 37.0% | 38.8% | 37.7% | 38.4% | |
| |
|---|
| Median (49 companies) | 16.4% | 15.6% | 14.8% | 13.4% | -14.8% |
|---|
| DragonWave Inc ($DWI) | 5.6% | -72.7% | -41.4% | -38.8% | |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newfoundland Capital Corp Ltd ($NCC.B) | | 8.7% | 5.5% | 76.8% | |
| Axia NetMedia Corp ($AXX) | 10.7% | 30.8% | 27.2% | 27.0% | |
| UrtheCast Corp ($UR) | | | | 26.5% | |
| TeraGo Inc ($TGO) | 21.6% | 20.9% | 21.5% | 23.1% | |
| Manitoba Telecom Services Inc ($MBT) | 16.3% | 19.8% | 18.1% | 22.4% | |
| |
|---|
| Median (52 companies) | 4.3% | 2.2% | 3.3% | 2.3% | 1.1% |
|---|
| DragonWave Inc ($DWI) | 3.3% | 2.4% | 1.9% | 1.1% | 2.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi2Wi Corp ($YTY) | -28.5% | -166.9% | | 136.7% | |
| Tucows Inc ($TC) | 12.8% | 17.7% | 22.5% | 35.4% | |
| Asian Television Network International Ltd ($SAT) | 102.7% | 34.6% | 23.6% | 23.4% | |
| Points International Ltd ($PTS) | 20.7% | 14.9% | 15.0% | 21.2% | |
| NeuLion Inc ($NLN) | -62.1% | -55.8% | -10.3% | 18.5% | |
| |
|---|
| Median (53 companies) | 7.2% | 9.2% | 8.3% | 8.3% | -41.9% |
|---|
| DragonWave Inc ($DWI) | 2.1% | -33.1% | -69.7% | -71.7% | -33.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Plaintree Systems Inc ($NPT) | 0.7x | | | 124.2x | |
| Advantex Marketing International Inc ($ADX) | | 4.8x | 2.2x | 5.0x | |
| MDC Partners Inc ($MDZ.A) | 7.3x | 12.4x | 112.6x | 4.6x | |
| Quebecor Inc ($QBR.B) | 2.0x | 3.7x | 3.9x | 4.2x | |
| Postmedia Network Canada Corp ($PNC.B) | 2.9x | 3.3x | 3.4x | 4.2x | |
| |
|---|
| Median (42 companies) | 1.0x | 1.4x | 1.3x | 1.5x | 9.4x |
|---|
