Epicore BioNetworks Inc demonstrated fast growth in recent years. Will the growth continue?
23.10.2014 • About Epicore BioNetworks Inc (
$EBN) • By InTwits
Epicore BioNetworks Inc is a growth stock in Industrial industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Epicore BioNetworks Inc showed growth in the last financial year. Epicore BioNetworks Inc's revenue surged on 35.7% in FY2014. Together with revenue growth Epicore BioNetworks Inc also managed to keep EBITDA growth. EBITDA grew 130% for the same period.
In the longer period the company showed fast revenue growth of 15.0% from FY2011 to FY2014 annually. EBITDA surged on 33.4% from FY2011 to FY2014 annually.
Epicore BioNetworks Inc ($EBN) financials for the last 5 years
| mln. $ | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 4 | 5 | 6 | 6 | 8 |
|---|
| Revenue growth, % | | 30.4% | 12.4% | -0.4% | 35.7% |
|---|
| Gross margin, % | 61.3% | 59.0% | 60.8% | 63.2% | 64.1% |
|---|
| SG&A, % | | | 18.0% | 20.1% | 16.5% |
|---|
| EBITDA | 1 | 1 | 1 | 1 | 2 |
|---|
| EBITDA growth, % | | 45.4% | 41.9% | -27.1% | 129.8% |
|---|
| EBITDA margin, % | 15.9% | 17.7% | 22.4% | 16.4% | 27.7% |
|---|
| Net Income | 1 | 0 | 1 | 0 | 1 |
|---|
| Net Income margin, % | 34.7% | 7.99% | 11.7% | 8.59% | 15.4% |
|---|
| |
| CAPEX | 0 | 0 | 2 | 0 | 0 |
|---|
| CAPEX/Revenue, % | 0.936% | 1.75% | 27.8% | 8.01% | 2.59% |
|---|
| Debt | 0 | 0 | 0 | 0 | 0 |
|---|
| Cash | 1 | 2 | 2 | 2 | 3 |
|---|
| Net Debt/EBITDA | -1.6x | -1.9x | -1.3x | -2.1x | -1.4x |
|---|
| |
| ROIC, % | 20.4% | 24.8% | 28.1% | 16.1% | 32.5% |
|---|
| ROE, % | 44.8% | 10.3% | 14.7% | 9.4% | 19.3% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. Epicore BioNetworks Inc's EBITDA margin surged on 11.3 pp from 16.4% to 27.7% in FY2014. In the last 3 years the company's EBITDA margin surged on 10 pp from 17.7% in FY2011 to 27.7% in FY2014.
We call Epicore BioNetworks Inc an attractive growth stock as together with the growth it delivers high ROIC at 32.5%. During the last three years it surged - it was 24.8% in FY2011. It's average ROIC for the last three years was 25.5%.
Epicore BioNetworks Inc's Net Income margin surged on 6.80 pp from 8.60% to 15.4% in FY2014. In the longer period Epicore BioNetworks Inc showed fast Net Income margin growth of 7.40 pp from 8% in FY2011 to 15.4% in FY2014.
Epicore BioNetworks Inc operates at ROE of 19.3%. For the last three years the average ROE was 14.5%.
Capital expenditures (CAPEX)
In FY2014 Epicore BioNetworks Inc had CAPEX/Revenue of 2.59%. Epicore BioNetworks Inc showed fast CAPEX/Revenue growth of 0.836 pp from 1.75% in FY2011 to 2.59% in FY2014. Average CAPEX/Revenue for the last three years was 12.8%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -1.4x Net Debt/EBITDA. In the last 3 years the company's leverage surged on 0.50x from -1.90x in FY2011 to -1.40x in FY2014.
Peers in Industrial
Below we provide Epicore BioNetworks 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Lumenpulse Inc ($LMP) | | | 56.7% | 33.9% | 47.0% |
| International Barrier Technology Inc ($IBH) | | 24.9% | 27.3% | 44.6% | 36.0% |
| Pacific Safety Products Inc ($PSP) | | -24.4% | -26.2% | -30.1% | 22.6% |
| ATS Automation Tooling Systems Inc ($ATA) | | -16.0% | 22.7% | -0.7% | 15.6% |
| Student Transportation Inc ($STB) | | 14.3% | 20.9% | 14.8% | 15.5% |
| |
|---|
| Median (14 companies) | | 8.0% | 16.2% | 4.6% | 7.2% |
|---|
| Epicore BioNetworks Inc ($EBN) | | 30.4% | 12.4% | -0.4% | 35.7% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Evertz Technologies Ltd ($ET) | 58.3% | 57.7% | 56.6% | 57.5% | 57.2% |
| Lumenpulse Inc ($LMP) | | 24.8% | 40.4% | 36.2% | 41.6% |
| CAE Inc ($CAE) | | 33.7% | 33.0% | 28.7% | 27.2% |
| Velan Inc ($VLN) | 29.9% | 26.6% | 20.0% | 22.8% | 26.8% |
| ATS Automation Tooling Systems Inc ($ATA) | 12.4% | 23.4% | 26.3% | 25.4% | 26.6% |
| |
|---|
| Median (14 companies) | 19.0% | 22.0% | 20.0% | 22.8% | 25.1% |
|---|
| Epicore BioNetworks Inc ($EBN) | 61.3% | 59.0% | 60.8% | 63.2% | 64.1% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Evertz Technologies Ltd ($ET) | 37.2% | 37.2% | 29.6% | 29.1% | 23.0% |
| CAE Inc ($CAE) | 23.4% | 24.1% | 23.5% | 18.5% | 21.8% |
| Student Transportation Inc ($STB) | 18.3% | 16.0% | 15.1% | 14.9% | 13.4% |
| Reko International Group Inc ($REK) | -4.7% | -0.4% | 8.8% | 9.7% | 13.0% |
| International Barrier Technology Inc ($IBH) | -35.6% | -4.7% | -7.7% | 5.1% | 12.4% |
| |
|---|
| Median (12 companies) | 5.7% | 5.5% | 5.9% | 8.7% | 11.8% |
|---|
| Epicore BioNetworks Inc ($EBN) | 15.9% | 17.7% | 22.4% | 16.4% | 27.7% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Heroux-Devtek Inc ($HRX) | 4.3% | 5.5% | 4.9% | 4.5% | 8.2% |
| Reko International Group Inc ($REK) | 2.2% | 2.2% | 4.7% | 3.8% | 7.9% |
| Student Transportation Inc ($STB) | 13.7% | 4.4% | 13.2% | 9.9% | 7.7% |
| CAE Inc ($CAE) | 8.6% | 6.8% | 9.1% | 4.8% | 7.6% |
| Velan Inc ($VLN) | 3.0% | 2.3% | 2.9% | 5.7% | 3.7% |
| |
|---|
| Median (14 companies) | 2.6% | 2.3% | 3.8% | 3.6% | 2.6% |
|---|
| Epicore BioNetworks Inc ($EBN) | 0.9% | 1.8% | 27.8% | 8.0% | 2.6% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| International Barrier Technology Inc ($IBH) | -39.9% | -22.2% | -20.9% | -0.0% | 20.8% |
| Evertz Technologies Ltd ($ET) | 32.3% | 30.0% | 19.9% | 20.5% | 16.5% |
| ATS Automation Tooling Systems Inc ($ATA) | -1.9% | 7.1% | 15.0% | 14.8% | 13.2% |
| Pacific Insight Electronics Corp ($PIH) | 4.6% | 1.5% | -2.9% | -0.8% | 11.7% |
| CAE Inc ($CAE) | 15.8% | 17.0% | 16.9% | 10.9% | 11.2% |
| |
|---|
| Median (14 companies) | 2.7% | 1.5% | 2.9% | 4.5% | 5.8% |
|---|
| Epicore BioNetworks Inc ($EBN) | 20.4% | 24.8% | 28.1% | 16.1% | 32.5% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Sigma Industries Inc ($SSG) | | | 4.4x | 11.3x | 225.9x |
| H2O Innovation Inc ($HEO) | | | | 4.2x | 73.2x |
| Student Transportation Inc ($STB) | 2.9x | 4.0x | 3.8x | 3.4x | 4.0x |
| Reko International Group Inc ($REK) | | | 5.7x | 3.3x | 3.0x |
| CAE Inc ($CAE) | 0.5x | 1.0x | 1.2x | 2.2x | 1.9x |
| |
|---|
| Median (11 companies) | -0.3x | 0.1x | 1.7x | 2.2x | 1.7x |
|---|
| Epicore BioNetworks Inc ($EBN) | -1.6x | -1.9x | -1.3x | -2.1x | -1.4x |
