TECSYS Inc revenue jumped on 23.0% in 2015 while EBITDA Margin decreased slightly on 1.3 pp from 9.0% to 7.7%
08.07.2015 • About TECSYS Inc (
$TCS) • By InTwits
TECSYS Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- TECSYS Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's in pair with industry average of 1.8%.
- CAPEX is quite volatile: 0.44 in FY2015, 0.43 in FY2014, 0.69 in FY2013, 1.4 in FY2012, 0.90 in FY2011
- The company has business model with low profitability: ROIC is at 8.3%
- It operates with high leverage: Net Debt/EBITDA is -1.4x while industry average is -2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
TECSYS Inc ($TCS) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 35.654 | 39.502 | 43.759 | 46.558 | 57.284 | 23.0% |
| Gross Profit | 15.676 | 17.451 | 18.283 | 20.293 | 27.573 | 35.9% |
| SG&A | | 11.019 | 11.677 | 12.805 | 18.626 | 45.5% |
| EBITDA | 2.304 | 3.152 | 3.220 | 4.208 | 4.415 | 4.9% |
| Net Income | 1.570 | 1.057 | 0.885 | 1.795 | 1.515 | -15.6% |
Balance Sheet
|
|---|
| Cash | 6.404 | 5.217 | 5.348 | 8.839 | 10.815 | 22.4% |
| Short Term Debt | 3.827 | 0.085 | 1.070 | 1.000 | 1.456 | 45.6% |
| Long Term Debt | 0.000 | 0.000 | 3.500 | 2.500 | 3.333 | 33.3% |
Cash flow
|
|---|
| Capex | 0.895 | 1.413 | 0.685 | 0.427 | 0.435 | 1.9% |
Ratios
|
|---|
| Revenue growth | -3.0% | 10.8% | 10.8% | 6.4% | 23.0% | |
| EBITDA growth | -29.9% | 36.8% | 2.2% | 30.7% | 4.9% | |
| Gross Margin | 44.0% | 44.2% | 41.8% | 43.6% | 48.1% | 4.5% |
| EBITDA Margin | 6.5% | 8.0% | 7.4% | 9.0% | 7.7% | -1.3% |
| Net Income Margin | 4.4% | 2.7% | 2.0% | 3.9% | 2.6% | -1.2% |
| SG&A, % of revenue | | 27.9% | 26.7% | 27.5% | 32.5% | 5.0% |
| CAPEX, % of revenue | 2.5% | 3.6% | 1.6% | 0.9% | 0.8% | -0.2% |
| ROIC | 7.7% | 8.5% | 7.4% | 11.8% | 8.3% | -3.4% |
| ROE | 9.5% | 6.7% | 5.7% | 11.3% | 7.6% | -3.7% |
| Net Debt/EBITDA | -1.1x | -1.6x | -0.2x | -1.3x | -1.4x | -0.1x |
Revenue and profitability
TECSYS Inc's Revenue surged on 23.0% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 47.6 pp from 40.4% to -7.2% in 2015.
Gross Margin increased on 4.5 pp from 43.6% to 48.1% in FY2015. SG&A as a % of Revenue increased on 5.0 pp from 27.5% to 32.5% in FY2015.
Net Income marign decreased slightly on 1.2 pp from 3.9% to 2.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 TECSYS Inc had CAPEX/Revenue of 0.76%. The company's CAPEX/Revenue decreased on 2.8 pp from 3.6% in FY2012 to 0.76% in FY2015. It's average CAPEX/Revenue for the last three years was 1.1%.
Return on investment
The company operates at low ROIC (8.34%) and ROE (7.58%). ROIC decreased on 3.4 pp from 11.8% to 8.3% in FY2015. ROE decreased on 3.7 pp from 11.3% to 7.6% in FY2015.
Leverage (Debt)
Debt level is -1.4x Net Debt / EBITDA and 1.1x Debt / EBITDA. Net Debt / EBITDA decreased on 0.1x from -1.3x to -1.4x in FY2015. Debt surged on 36.8% in FY2015 while cash surged on 22.4% in FY2015.
Appendix 1: Peers in Technology
Below we provide TECSYS Inc benchmarking against other companies in Technology 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 |
|---|
| Mitel Networks Corp ($MNW) | -9.0% | 3.8% | -5.7% | 91.4% | |
| Redknee Solutions Inc ($RKN) | 25.9% | -4.5% | 151.6% | 81.4% | |
| Intrinsyc Technologies Corp ($ITC) | -19.0% | -26.8% | -21.7% | 70.8% | |
| Espial Group Inc ($ESP) | 10.2% | -9.5% | -5.5% | 59.4% | |
| iLOOKABOUT Corp ($ILA) | -7.6% | 19.6% | 8.9% | 58.8% | |
| |
|---|
| Median (33 companies) | 11.0% | 3.7% | 12.4% | 15.2% | -3.8% |
|---|
| TECSYS Inc ($TCS) | | 10.8% | 10.8% | 6.4% | 23.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ProntoForms Corp ($PFM) | 90.1% | 96.1% | 98.1% | 98.0% | |
| Constellation Software Inc/Canada ($CSU) | 85.5% | 86.2% | 85.5% | 86.1% | |
| Symbility Solutions Inc ($SY) | 82.1% | 80.6% | 79.9% | 81.0% | |
| Espial Group Inc ($ESP) | 77.9% | 77.5% | 81.7% | 78.5% | |
| Absolute Software Corp ($ABT) | 71.6% | 73.6% | 76.3% | 78.4% | |
| |
|---|
| Median (31 companies) | 50.9% | 59.2% | 53.2% | 52.2% | 47.6% |
|---|
| TECSYS Inc ($TCS) | 44.0% | 44.2% | 41.8% | 43.6% | 48.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi-LAN Inc ($WIN) | 26.5% | 40.9% | 12.2% | 56.2% | |
| Computer Modelling Group Ltd ($CMG) | 51.5% | 53.8% | 52.2% | 51.5% | 50.8% |
| Open Text Corp ($OTC) | 27.1% | 26.5% | 29.1% | 30.0% | |
| Sandvine Corp ($SVC) | 5.1% | 0.9% | 24.0% | 28.2% | |
| Enghouse Systems Ltd ($ESL) | 24.8% | 25.4% | 23.6% | 24.7% | |
| |
|---|
| Median (33 companies) | 8.9% | 8.6% | 5.5% | 7.0% | 17.1% |
|---|
| TECSYS Inc ($TCS) | 6.5% | 8.0% | 7.4% | 9.0% | 7.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Halogen Software Inc ($HGN) | | 4.9% | 9.0% | 8.4% | |
| Intermap Technologies Corp ($IMP) | 0.4% | 1.0% | 3.2% | 7.4% | |
| Kinaxis Inc ($KXS) | 2.2% | 2.9% | 2.3% | 5.0% | |
| BlackBerry Ltd ($BB) | 5.2% | 4.9% | 3.8% | 4.2% | 2.6% |
| ProntoForms Corp ($PFM) | 1.3% | 1.1% | 0.8% | 3.6% | |
| |
|---|
| Median (33 companies) | 1.3% | 1.5% | 1.4% | 1.3% | 2.1% |
|---|
| TECSYS Inc ($TCS) | 2.5% | 3.6% | 1.6% | 0.9% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kinaxis Inc ($KXS) | | | 61.8% | 63.6% | |
| Computer Modelling Group Ltd ($CMG) | 75.5% | 74.2% | 68.6% | 62.9% | 63.5% |
| SMART Technologies Inc ($SMA) | 43.2% | 21.4% | -18.9% | 28.1% | 43.8% |
| Constellation Software Inc/Canada ($CSU) | 45.8% | 45.9% | 22.4% | 24.7% | |
| Sandvine Corp ($SVC) | -1.7% | -4.9% | 16.9% | 20.2% | |
| |
|---|
| Median (33 companies) | 4.7% | 2.9% | -4.8% | 0.5% | 6.7% |
|---|
| TECSYS Inc ($TCS) | 7.7% | 8.5% | 7.4% | 11.8% | 8.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Data Group Ltd ($DGI) | 3.2x | 3.5x | 3.7x | 4.0x | |
| Critical Control Energy Services Corp ($CCZ) | 1.9x | | 1.4x | 2.7x | |
| Mitel Networks Corp ($MNW) | 4.9x | 3.7x | 3.8x | 2.6x | |
| Open Text Corp ($OTC) | 0.0x | 0.1x | 0.2x | 1.8x | |
| CGI Group Inc ($GIB.A) | 1.3x | 6.0x | 2.4x | 1.3x | |
| |
|---|
| Median (21 companies) | -0.3x | -0.2x | -0.6x | -1.3x | 1.3x |
|---|
| TECSYS Inc ($TCS) | -1.1x | -1.6x | -0.2x | -1.3x | -1.4x |
