Heroux-Devtek Inc reports 181% CAPEX growth and 34.1% Revenue growth
28.05.2015 • About Heroux-Devtek Inc (
$HRX) • By InTwits
Heroux-Devtek Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Heroux-Devtek Inc doesn't have a profitable business model yet: FY2015 ROIC is 1.6%
- EBITDA Margin is declining: in FY2015 vs. in FY2014 vs. 16.0% in FY2011
- Heroux-Devtek Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.1%. At the same time it's in pair with industry average of 6.7%.
- CAPEX is quite volatile: 62.7 in FY2015, 22.4 in FY2014, 11.5 in FY2013, 12.5 in FY2012, 19.6 in FY2011
- The company has potentially unprofitable business model: ROIC is at 1.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Heroux-Devtek Inc ($HRX) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 357.6 | 253.5 | 257.0 | 272.0 | 364.9 | 34.1% |
| Gross Profit | 58.3 | 42.7 | 39.8 | 42.4 | 59.2 | 39.5% |
| SG&A | 25.8 | 18.9 | 19.3 | 19.9 | 29.8 | 49.5% |
| EBITDA | 57.1 | 37.4 | 33.0 | | | |
| Net Income | 19.1 | 26.5 | 131.6 | 9.2 | 3.2 | -65.1% |
Balance Sheet
|
|---|
| Cash | 32.9 | 62.0 | 101.3 | 47.3 | 35.1 | -25.9% |
| Short Term Debt | 6.4 | 10.9 | 3.8 | 3.6 | 6.0 | 63.7% |
| Long Term Debt | 99.2 | 108.2 | 59.1 | 145.2 | 107.0 | -26.4% |
Cash flow
|
|---|
| Capex | 19.6 | 12.5 | 11.5 | 22.4 | 62.7 | 180.5% |
Ratios
|
|---|
| Revenue growth | 11.6% | -29.1% | 1.4% | 5.8% | 34.1% | |
| EBITDA growth | 17.9% | -34.4% | -12.0% | | | |
| Gross Margin | 16.3% | 16.8% | 15.5% | 15.6% | 16.2% | 0.6% |
| EBITDA Margin | 16.0% | 14.8% | 12.8% | 0.0% | 0.0% | 0.0% |
| Net Income Margin | 5.3% | 10.4% | 51.2% | 3.4% | 0.9% | -2.5% |
| SG&A, % of revenue | 7.2% | 7.4% | 7.5% | 7.3% | 8.2% | 0.8% |
| CAPEX, % of revenue | 5.5% | 4.9% | 4.5% | 8.2% | 17.2% | 9.0% |
| ROIC | 9.6% | 6.5% | 6.0% | 4.5% | 1.6% | -2.8% |
| ROE | 8.7% | 11.3% | 56.4% | 4.0% | 1.2% | -2.8% |
| Net Debt/EBITDA | 1.3x | 1.5x | -1.2x | | | 0.0x |
Revenue and profitability
The company's Revenue jumped on 34.1% in FY2015.
Gross Margin increased slightly on 0.62 pp from 15.6% to 16.2% in FY2015. SG&A as a % of Revenue increased slightly on 0.84 pp from 7.3% to 8.2% in FY2015.
Net Income marign decreased on 2.5 pp from 3.4% to 0.88% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 17.2%. The company showed fast CAPEX/Revenue growth of 12.3 pp from 4.9% in FY2012 to 17.2% in FY2015. It's average level of CAPEX/Revenue for the last three years was 10.0%.
Return on investment
The company operates at low ROIC (1.65%) and ROE (1.21%). ROIC decreased on 2.8 pp from 4.5% to 1.6% in FY2015. ROE decreased on 2.8 pp from 4.0% to 1.2% in FY2015.
Leverage (Debt)
Debt dropped on 24.1% in FY2015 while cash dropped on 25.9% in FY2015.
Appendix 1: Peers in Industrial
Below we provide Heroux-Devtek Inc benchmarking against other companies in Industrial industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
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 ($LMP) | | 56.7% | 33.9% | 47.0% | |
| |
|---|
| Median (91 companies) | 12.5% | 11.0% | 5.1% | 9.2% | 8.1% |
|---|
| Heroux-Devtek Inc ($HRX) | | -29.1% | 1.4% | 5.8% | 34.1% |
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 ($FLY) | 54.0% | 57.2% | 59.2% | 62.9% | |
| |
|---|
| Median (87 companies) | 23.3% | 23.2% | 23.4% | 22.9% | 26.2% |
|---|
| Heroux-Devtek Inc ($HRX) | 16.3% | 16.8% | 15.5% | 15.6% | 16.2% |
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 ($BIN) | 32.2% | 30.7% | 33.1% | 34.0% | |
| |
|---|
| Median (85 companies) | 8.1% | 9.1% | 8.1% | 7.2% | 11.5% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cargojet Inc ($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) | 2.4% | 3.0% | 3.6% | 3.1% | 2.8% |
|---|
| Heroux-Devtek Inc ($HRX) | 5.5% | 4.9% | 4.5% | 8.2% | 17.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vitreous Glass Inc ($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) | 8.9% | 9.7% | 8.5% | 8.8% | 9.3% |
|---|
| Heroux-Devtek Inc ($HRX) | 9.6% | 6.5% | 6.0% | 4.5% | 1.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sigma Industries Inc ($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 (72 companies) | 1.1x | 1.5x | 1.5x | 1.3x | 1.7x |
|---|
