RDM Corp reports 87.2% Net Income growth and 3.7% Revenue growth
19.11.2015 • About RDM Corp (
$RC) • By InTwits
RDM Corp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 23.8% in FY2015 vs. 18.0% in FY2014 vs. 3.1% in FY2011
- EBITDA Margin is quite volatile: 23.8% in FY2015, 18.0% in FY2014, 15.7% in FY2013, 10.0% in FY2012, 3.1% in FY2011
- RDM Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's in pair with industry average of 73.9%.
- CAPEX is quite volatile: 0.38 in FY2015, 1.3 in FY2014, 0.93 in FY2013, 0.31 in FY2012, 0.28 in FY2011
- The company has highly profitable business model: ROIC is at 14.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
RDM Corp ($RC) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 21.432 | 20.440 | 21.870 | 22.689 | 23.530 | 3.7% |
| Gross Profit | 8.412 | 10.400 | 11.632 | 12.615 | 14.246 | 12.9% |
| SG&A | | | 5.350 | 5.229 | 5.035 | -3.7% |
| EBITDA | 0.666 | 2.034 | 3.423 | 4.073 | 5.599 | 37.5% |
| Net Income | -0.230 | 1.791 | -0.519 | 2.845 | 5.326 | 87.2% |
Balance Sheet
|
|---|
| Cash | 14.815 | 18.897 | 20.126 | 22.422 | 26.405 | 17.8% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.280 | 0.305 | 0.930 | 1.290 | 0.376 | -70.9% |
Ratios
|
|---|
| Revenue growth | 7.1% | -4.6% | 7.0% | 3.7% | 3.7% | |
| EBITDA growth | -165.4% | 205.4% | 68.3% | 19.0% | 37.5% | |
| Gross Margin | 39.2% | 50.9% | 53.2% | 55.6% | 60.5% | 4.9% |
| EBITDA Margin | 3.1% | 10.0% | 15.7% | 18.0% | 23.8% | 5.8% |
| Net Income Margin | -1.1% | 8.8% | -2.4% | 12.5% | 22.6% | 10.1% |
| SG&A, % of revenue | | | 24.5% | 23.0% | 21.4% | -1.6% |
| CAPEX, % of revenue | 1.3% | 1.5% | 4.3% | 5.7% | 1.6% | -4.1% |
| ROIC | -2.3% | 3.5% | 7.8% | 11.0% | 14.7% | 3.7% |
| ROE | -1.0% | 7.2% | -2.0% | 10.6% | 17.3% | 6.7% |
| Net Debt/EBITDA | -22.2x | -9.3x | -5.9x | -5.5x | -4.7x | 0.8x |
Revenue and profitability
RDM Corp's Revenue increased on 3.7% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.8 pp from 18.0% to 23.8% in FY2015.
Gross Margin increased on 4.9 pp from 55.6% to 60.5% in FY2015. SG&A as a % of Revenue decreased slightly on 1.6 pp from 23.0% to 21.4% in FY2015.
Net Income marign jumped on 10.1 pp from 12.5% to 22.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 RDM Corp had CAPEX/Revenue of 1.6%. The company showed almost no change in CAPEX/Revenue from FY2012 to FY2015. It's average level of CAPEX/Revenue for the last three years was 3.8%.
Return on investment
The company operates at good ROIC (14.68%) and ROE (17.31%). ROIC increased on 3.7 pp from 11.0% to 14.7% in FY2015. ROE increased on 6.7 pp from 10.6% to 17.3% in FY2015.
Leverage (Debt)
The company has no debt. Cash surged on 17.8% in FY2015.
Appendix 1: Peers in Communications
Below we provide RDM Corp benchmarking against other companies in Communications 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 |
|---|
| 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 ($AIM) | 2.9% | 6.3% | -25.6% | 47.5% | |
| |
|---|
| Median (49 companies) | 7.9% | 5.0% | 1.8% | 1.9% | 1.5% |
|---|
| RDM Corp ($RC) | | -4.6% | 7.0% | 3.7% | 3.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanted Technologies Corp ($WAN) | 86.6% | 90.5% | 93.2% | 94.3% | 95.6% |
| CounterPath Corp ($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 ($STC) | 74.5% | 68.8% | | 66.9% | 67.2% |
| |
|---|
| Median (40 companies) | 43.3% | 42.8% | 42.5% | 41.8% | 58.0% |
|---|
| RDM Corp ($RC) | 39.2% | 50.9% | 53.2% | 55.6% | 60.5% |
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% | 46.2% |
| Cogeco Inc ($CGO) | 28.1% | 43.2% | 43.5% | 43.3% | 44.3% |
| Shaw Communications Inc ($SJR.B) | 43.3% | 42.7% | 43.3% | 42.1% | 44.6% |
| BCE Inc ($BCE) | 37.0% | 38.8% | 37.7% | 38.4% | |
| |
|---|
| Median (49 companies) | 16.4% | 15.6% | 14.1% | 11.7% | 10.4% |
|---|
| RDM Corp ($RC) | 3.1% | 10.0% | 15.7% | 18.0% | 23.8% |
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 ($MBT) | 16.3% | 19.8% | 18.1% | 22.4% | |
| |
|---|
| Median (52 companies) | 4.3% | 2.3% | 3.0% | 2.1% | 2.3% |
|---|
| RDM Corp ($RC) | 1.3% | 1.5% | 4.3% | 5.7% | 1.6% |
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 ($NLN) | -62.1% | -55.8% | -10.3% | 18.5% | |
| |
|---|
| Median (53 companies) | 7.2% | 9.2% | 8.3% | 8.0% | 1.6% |
|---|
| RDM Corp ($RC) | -2.3% | 3.5% | 7.8% | 11.0% | 14.7% |
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 ($PNC.B) | 2.9x | 3.3x | 3.4x | 4.2x | |
| |
|---|
| Median (41 companies) | 1.0x | 1.4x | 1.3x | 1.5x | 2.6x |
|---|
| RDM Corp ($RC) | -22.2x | -9.3x | -5.9x | -5.5x | -4.7x |
