Vecima Networks Inc reports 38.5% Net Income decline while 4.2 pp EBITDA Margin growth from 20.0% to 24.2%
25.09.2015 • About Vecima Networks Inc (
$VCM) • By InTwits
Vecima Networks Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 24.2% in FY2015, 20.0% in FY2014, 15.0% in FY2013, 21.5% in FY2012, 6.2% in FY2011
- Vecima Networks Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.3%. At the same time it's in pair with industry average of 1.9%.
- CAPEX is quite volatile: 1.1 in 2015, 1.4 in 2014, 1.2 in 2013, 0.42 in 2012, 1.8 in 2011
- The company has highly profitable business model: ROIC is at 14.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Vecima Networks Inc ($VCM) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 84.533 | 95.741 | 91.897 | 90.705 | 90.940 | 0.3% |
| Gross Profit | 25.482 | 35.208 | 39.205 | 44.874 | 49.838 | 11.1% |
| SG&A | | | 22.734 | 21.657 | 19.445 | -10.2% |
| EBITDA | 5.256 | 20.544 | 13.744 | 18.137 | 21.996 | 21.3% |
| Net Income | 0.297 | 13.266 | 19.162 | 24.602 | 15.137 | -38.5% |
Balance Sheet
|
|---|
| Cash | 5.095 | 19.549 | 7.148 | 15.282 | 12.777 | -16.4% |
| Short Term Debt | 3.958 | 0.250 | 0.250 | 0.415 | 0.331 | -20.2% |
| Long Term Debt | 0.000 | 3.479 | 3.229 | 2.958 | 2.708 | -8.5% |
Cash flow
|
|---|
| Capex | 4.241 | 3.206 | 2.261 | 2.979 | 2.057 | -30.9% |
Ratios
|
|---|
| Revenue growth | -25.3% | 13.3% | -4.0% | -1.3% | 0.3% | |
| EBITDA growth | 29.9% | 290.9% | -33.1% | 32.0% | 21.3% | |
| Gross Margin | 30.1% | 36.8% | 42.7% | 49.5% | 54.8% | 5.3% |
| EBITDA Margin | 6.2% | 21.5% | 15.0% | 20.0% | 24.2% | 4.2% |
| Net Income Margin | 0.4% | 13.9% | 20.9% | 27.1% | 16.6% | -10.5% |
| SG&A, % of revenue | | | 24.7% | 23.9% | 21.4% | -2.5% |
| CAPEX, % of revenue | 5.0% | 3.3% | 2.5% | 3.3% | 2.3% | -1.0% |
| ROIC | -0.6% | 11.7% | 6.4% | 11.4% | 14.5% | 3.1% |
| ROE | 0.2% | 9.9% | 13.8% | 17.8% | 10.4% | -7.4% |
| Net Debt/EBITDA | -0.2x | -0.8x | -0.3x | -0.7x | -0.4x | 0.2x |
Revenue and profitability
The company's Revenue showed almost no change in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 114 pp from 37.2% to -76.8% in 2015.
Gross Margin increased on 5.3 pp from 49.5% to 54.8% in FY2015. SG&A as a % of Revenue decreased on 2.5 pp from 23.9% to 21.4% in FY2015.
Net Income marign dropped on 10.5 pp from 27.1% to 16.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.3% in FY2015. The company's CAPEX/Revenue decreased slightly on 1.1 pp from 3.3% in FY2012 to 2.3% in FY2015. For the last three years the average CAPEX/Revenue was 2.7%.
Return on investment
The company operates at good ROIC (14.55%) while ROE is low (10.41%). ROIC increased on 3.1 pp from 11.4% to 14.5% in FY2015. ROE decreased on 7.4 pp from 17.8% to 10.4% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.4x and Debt / EBITDA is 0.1x. Net Debt / EBITDA jumped on 0.2x from -0.7x to -0.4x in FY2015. Debt decreased on 9.9% in FY2015 while cash dropped on 16.4% in FY2015.
Appendix 1: Peers in Communications
Below you can find Vecima Networks 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) | | 14.5% | 9.1% | 50.8% | -7.1% |
| Aimia Inc ($AIM) | 2.9% | 6.3% | -25.6% | 47.5% | |
| |
|---|
| Median (49 companies) | 7.5% | 2.5% | 2.1% | 3.1% | 5.1% |
|---|
| Vecima Networks Inc ($VCM) | | 13.3% | -4.0% | -1.3% | 0.3% |
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% | 81.5% |
| Mediagrif Interactive Technologies Inc ($MDF) | 78.2% | 79.8% | 79.8% | 78.8% | 80.1% |
| NeuLion Inc ($NLN) | 45.2% | 53.6% | 63.8% | 70.2% | |
| Sangoma Technologies Corp ($STC) | 74.5% | 68.8% | | 66.9% | |
| |
|---|
| Median (40 companies) | 43.3% | 43.3% | 42.5% | 41.8% | 46.4% |
|---|
| Vecima Networks Inc ($VCM) | 30.1% | 36.8% | 42.7% | 49.5% | 54.8% |
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 ($BCE) | 37.0% | 38.8% | 37.7% | 38.4% | |
| |
|---|
| Median (49 companies) | 16.4% | 13.5% | 14.1% | 11.7% | 4.9% |
|---|
| Vecima Networks Inc ($VCM) | 6.2% | 21.5% | 15.0% | 20.0% | 24.2% |
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 ($MBT) | 16.3% | 19.8% | 18.1% | 22.4% | |
| |
|---|
| Median (52 companies) | 4.3% | 2.2% | 3.3% | 2.1% | 2.0% |
|---|
| Vecima Networks Inc ($VCM) | 5.0% | 3.3% | 2.5% | 3.3% | 2.3% |
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 ($NLN) | -62.1% | -55.8% | -10.3% | 18.5% | |
| |
|---|
| Median (53 companies) | 7.2% | 8.0% | 8.3% | 8.0% | -21.2% |
|---|
| Vecima Networks Inc ($VCM) | -0.6% | 11.7% | 6.4% | 11.4% | 14.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Plaintree Systems Inc ($NPT) | 0.7x | | | 124.2x | 3.9x |
| Advantex Marketing International Inc ($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 ($PNC.B) | 2.9x | 3.3x | 3.4x | 4.2x | |
| |
|---|
| Median (41 companies) | 1.0x | 1.4x | 1.3x | 1.5x | 3.9x |
|---|
| Vecima Networks Inc ($VCM) | -0.2x | -0.8x | -0.3x | -0.7x | -0.4x |
