Velan Inc Net Income dropped on 32.0% in 2015 and Revenue showed almost no change
19.05.2015 • About Velan Inc (
$VLN) • By InTwits
Velan Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Velan Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's in pair with industry average of 8.6%.
- CAPEX is quite volatile: 14.4 in FY2015, 18.8 in FY2014, 28.4 in FY2013, 12.7 in FY2012, 8.7 in FY2011
- The company has business model with low profitability: ROIC is at 7.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Velan Inc ($VLN) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 380.7 | 437.1 | 499.9 | 511.9 | 513.0 | 0.2% |
| Gross Profit | 101.4 | 87.3 | 113.8 | 137.2 | 133.1 | -3.0% |
| SG&A | | | | | 93.4 | |
| EBITDA | 37.4 | 20.6 | 38.7 | 61.5 | 51.4 | -16.4% |
| Net Income | 21.2 | 7.9 | 6.2 | 30.8 | 20.9 | -32.0% |
Balance Sheet
|
|---|
| Cash | 120.0 | 65.4 | 79.4 | 117.9 | 124.6 | 5.6% |
| Short Term Debt | 7.1 | 35.0 | 63.1 | 47.7 | 35.5 | -25.6% |
| Long Term Debt | 4.4 | 7.9 | 16.9 | 12.9 | 5.2 | -59.5% |
Cash flow
|
|---|
| Capex | 8.7 | 12.7 | 28.4 | 18.8 | 14.4 | -23.2% |
Ratios
|
|---|
| Revenue growth | -18.3% | 14.8% | 14.4% | 2.4% | 0.2% | |
| EBITDA growth | -49.7% | -44.8% | 87.7% | 58.8% | -16.4% | |
| Gross Margin | 26.6% | 20.0% | 22.8% | 26.8% | 26.0% | -0.9% |
| EBITDA Margin | 9.8% | 4.7% | 7.7% | 12.0% | 10.0% | -2.0% |
| Net Income Margin | 5.6% | 1.8% | 1.2% | 6.0% | 4.1% | -1.9% |
| SG&A, % of revenue | | | | | 18.2% | 18.2% |
| CAPEX, % of revenue | 2.3% | 2.9% | 5.7% | 3.7% | 2.8% | -0.9% |
| ROIC | 8.0% | 2.1% | 6.7% | 10.7% | 7.4% | -3.3% |
| ROE | 6.2% | 2.4% | 1.9% | 8.8% | 5.4% | -3.4% |
| Net Debt/EBITDA | -2.9x | -1.1x | 0.0x | -0.9x | -1.6x | -0.7x |
Revenue and profitability
The company's Revenue showed almost no change in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 64.8 pp from -38.2% to 26.5% in 2015.
Gross Margin decreased slightly on 0.85 pp from 26.8% to 26.0% in FY2015.
Net Income marign decreased slightly on 1.9 pp from 6.0% to 4.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.8% in FY2015. Velan Inc's CAPEX/Revenue showed almost no change from FY2012 to FY2015. It's average CAPEX/Revenue for the last three years was 4.1%.
Return on investment
The company operates at low ROIC (7.43%) and ROE (5.38%). ROIC decreased on 3.3 pp from 10.7% to 7.4% in FY2015. ROE decreased on 3.4 pp from 8.8% to 5.4% in FY2015.
Leverage (Debt)
Debt level is -1.6x Net Debt / EBITDA and 0.8x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from -0.9x to -1.6x in FY2015. Debt dropped on 32.8% in FY2015 while cash increased on 5.6% in FY2015.
Appendix 1: Peers in Industrial
Below you can find Velan Inc benchmarking vs. other companies in Industrial 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 |
|---|
| Electrovaya Inc ($EFL) | 104.3% | -4.0% | -71.2% | 160.5% | |
| Enterprise Group Inc ($E) | 14.5% | 3.5% | 88.3% | 128.5% | |
| Carmanah Technologies Corp ($CMH) | 5.8% | -26.4% | -2.0% | 68.8% | |
| Exco Technologies Ltd ($XTC) | 22.4% | 19.7% | 0.9% | 50.5% | |
| Lumenpulse Inc ($LMP) | | 56.7% | 33.9% | 47.0% | |
| |
|---|
| Median (91 companies) | 12.4% | 10.3% | 4.9% | 9.2% | |
|---|
| Velan Inc ($VLN) | | 14.8% | 14.4% | 2.4% | 0.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| WSP Global Inc ($WSP) | 81.1% | 81.1% | 83.2% | 81.0% | |
| Pure Technologies Ltd ($PUR) | 75.7% | 77.9% | 78.0% | 77.5% | |
| Alarmforce Industries Inc ($AF) | 76.4% | 75.0% | 76.5% | 72.2% | |
| Epicore BioNetworks Inc ($EBN) | 59.0% | 60.8% | 63.2% | 64.1% | |
| FLYHT Aerospace Solutions Ltd ($FLY) | 54.0% | 57.2% | 59.2% | 62.9% | |
| |
|---|
| Median (87 companies) | 23.2% | 23.2% | 23.4% | 22.3% | |
|---|
| Velan Inc ($VLN) | 26.6% | 20.0% | 22.8% | 26.8% | 26.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Canadian National Railway Co ($CNR) | 46.3% | 46.5% | 45.9% | 46.8% | |
| Canadian Pacific Railway Ltd ($CP) | 28.1% | 26.1% | 32.4% | 43.7% | |
| Vitreous Glass Inc ($VCI) | 29.0% | 31.4% | 32.2% | 37.8% | |
| Questor Technology Inc ($QST) | 25.1% | 25.7% | 34.9% | 34.1% | |
| Progressive Waste Solutions Ltd ($BIN) | 32.2% | 30.7% | 33.1% | 34.0% | |
| |
|---|
| Median (84 companies) | 8.1% | 9.3% | 8.3% | 7.1% | |
|---|
| Velan Inc ($VLN) | 9.8% | 4.7% | 7.7% | 12.0% | 10.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cargojet Inc ($CJT.A) | 6.8% | 7.0% | 6.3% | 54.1% | |
| Newalta Corp ($NAL) | 17.2% | 21.7% | 34.5% | 35.1% | |
| Enterprise Group Inc ($E) | 3.6% | 17.4% | 27.2% | 32.7% | |
| ENTREC Corp ($ENT) | | 35.0% | 26.7% | 29.5% | |
| Horizon North Logistics Inc ($HNL) | 25.1% | 26.5% | 16.3% | 24.1% | |
| |
|---|
| Median (91 companies) | 2.7% | 3.1% | 3.6% | 3.1% | |
|---|
| Velan Inc ($VLN) | 2.3% | 2.9% | 5.7% | 3.7% | 2.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vitreous Glass Inc ($VCI) | 26.1% | 30.5% | 32.3% | 48.3% | |
| Photon Control Inc ($PHO) | 10.1% | 21.0% | 44.4% | 38.0% | |
| SNC-Lavalin Group Inc ($SNC) | 14.6% | 10.7% | 4.0% | 35.2% | |
| Alarmforce Industries Inc ($AF) | 18.3% | 5.3% | 24.0% | 33.9% | |
| Epicore BioNetworks Inc ($EBN) | 24.8% | 28.1% | 16.1% | 32.5% | |
| |
|---|
| Median (92 companies) | 9.1% | 9.7% | 8.5% | 8.3% | |
|---|
| Velan Inc ($VLN) | 8.0% | 2.1% | 6.7% | 10.7% | 7.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sigma Industries Inc ($SSG) | | 4.4x | 11.3x | 225.9x | |
| H2O Innovation Inc ($HEO) | | | 4.2x | 73.2x | |
| Grand Power Logistics Group Inc ($GPW) | | 47.8x | | 53.1x | |
| Cargojet Inc ($CJT.A) | 1.8x | 1.5x | 1.5x | 31.5x | |
| IBI Group Inc ($IBG) | 4.2x | 6.5x | | 8.3x | |
| |
|---|
| Median (71 companies) | 1.1x | 1.5x | 1.5x | 1.3x | |
|---|
| Velan Inc ($VLN) | -2.9x | -1.1x | 0.0x | -0.9x | -1.6x |
