Covalon Technologies Ltd Net Income dropped on 139% in 2015 and Revenue dropped on 16.3%
27.01.2016 • About Covalon Technologies Ltd (
$COV) • By InTwits
Covalon Technologies Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Covalon Technologies Ltd doesn't have a profitable business model yet: FY2015 ROIC is -12.4%
- The company operates at negative EBITDA Margin: -6.8%
- Covalon Technologies Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 was 0.0%. On average EBITDA Margin was -19.3% for the sames years0
- Covalon Technologies Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's a lot of higher than industry average of 65.1%.
- CAPEX is quite volatile: 0.17 in FY2015, 0.012 in FY2014, 0.084 in FY2013, 0.12 in FY2012, 0.049 in FY2011
- The company has unprofitable business model: ROIC is at -12.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Covalon Technologies Ltd ($COV) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2.588 | 3.793 | 4.134 | 9.061 | 7.589 | -16.3% |
| Gross Profit | 1.129 | 1.465 | 2.089 | 6.583 | 4.756 | -27.7% |
| SG&A | | | 2.243 | 3.149 | 4.188 | 33.0% |
| EBITDA | -3.254 | -3.533 | -0.692 | 2.739 | -0.517 | -118.9% |
| Net Income | -3.562 | -3.991 | -0.993 | 2.402 | -0.942 | -139.2% |
Balance Sheet
|
|---|
| Cash | 4.763 | 1.143 | 0.633 | 3.575 | 1.305 | -63.5% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.846 | |
| Long Term Debt | 0.000 | 0.000 | 0.516 | 0.661 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 0.049 | 0.125 | 0.084 | 0.012 | 0.172 | 1,328.2% |
Ratios
|
|---|
| Revenue growth | -19.9% | 46.6% | 9.0% | 119.2% | -16.3% | |
| EBITDA growth | 82.5% | 8.6% | -80.4% | -495.9% | -118.9% | |
| Gross Margin | 43.6% | 38.6% | 50.5% | 72.6% | 62.7% | -10.0% |
| EBITDA Margin | -125.7% | -93.1% | -16.7% | 30.2% | -6.8% | -37.0% |
| Net Income Margin | -137.6% | -105.2% | -24.0% | 26.5% | -12.4% | -38.9% |
| SG&A, % of revenue | | | 54.3% | 34.8% | 55.2% | 20.4% |
| CAPEX, % of revenue | 1.9% | 3.3% | 2.0% | 0.1% | 2.3% | 2.1% |
| ROIC | -49.6% | -75.8% | -30.1% | 50.6% | -12.4% | -63.0% |
| ROE | -48.8% | -77.9% | -32.1% | 56.7% | -18.3% | -75.0% |
| Net Debt/EBITDA | | | | -1.1x | | 1.1x |
Revenue and profitability
Covalon Technologies Ltd's Revenue dropped on 16.3% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 37.0 pp from 30.2% to -6.8% in FY2015.
Gross Margin decreased on 10.0 pp from 72.6% to 62.7% in FY2015. SG&A as a % of Revenue jumped on 20.4 pp from 34.8% to 55.2% in FY2015.
Net Income marign dropped on 38.9 pp from 26.5% to -12.4% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Covalon Technologies Ltd had CAPEX/Revenue of 2.3%. CAPEX/Revenue decreased slightly on 1.0 pp from 3.3% in FY2012 to 2.3% in FY2015. Average CAPEX/Revenue for the last three years was 1.5%.
Return on investment
The company operates at negative ROIC (-12.36%) and ROE (-18.27%). ROIC dropped on 63.0 pp from 50.6% to -12.4% in FY2015. ROE dropped on 75.0 pp from 56.7% to -18.3% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.4x and Debt / EBITDA is . Net Debt / EBITDA jumped on 1.1x from -1.1x to in FY2015. Debt surged on 28.2% in FY2015 while cash dropped on 63.5% in FY2015.
Appendix 1: Peers in Consumer, Non-cyclical
Below we provide Covalon Technologies Ltd benchmarking against other companies in Consumer, Non-cyclical 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 |
|---|
| GDI Integrated Facility Services Inc ($GDI) | 43.8% | -38.8% | -72.9% | 218,969.1% | |
| Cardiome Pharma Corp ($COM) | -97.7% | -47.6% | 471.7% | 566.0% | |
| Patient Home Monitoring Corp ($PHM) | | 170.2% | 1.9% | 433.0% | 238.4% |
| Family Memorials Inc ($FAM) | -13.6% | 54.7% | 22.9% | 245.3% | |
| Nobilis Health Corp ($NHC) | 16.6% | 45.3% | 49.0% | 169.9% | |
| |
|---|
| Median (86 companies) | 13.6% | 8.1% | 5.3% | 12.7% | 6.6% |
|---|
| Covalon Technologies Ltd ($COV) | | 46.6% | 9.0% | 119.2% | -16.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nobilis Health Corp ($NHC) | | | | 99.8% | |
| Cipher Pharmaceuticals Inc ($CPH) | | | 99.5% | 98.3% | |
| Heritage Global Inc ($HGP) | 99.5% | | | 95.7% | |
| Ritchie Bros Auctioneers Inc ($RBA) | 87.9% | 88.7% | 88.4% | 88.0% | |
| Concordia Healthcare Corp ($CXR) | | | 79.4% | 86.0% | |
| |
|---|
| Median (74 companies) | 34.5% | 36.1% | 35.9% | 35.1% | 30.1% |
|---|
| Covalon Technologies Ltd ($COV) | 43.6% | 38.6% | 50.5% | 72.6% | 62.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cipher Pharmaceuticals Inc ($CPH) | -50.0% | 40.6% | 71.4% | 63.7% | |
| Merus Labs International Inc ($MSL) | | 32.9% | 64.7% | 46.2% | 61.5% |
| Valeant Pharmaceuticals International Inc ($VRX) | 37.0% | 30.6% | 27.8% | 45.6% | |
| EnerCare Inc ($ECI) | 59.0% | 52.8% | 51.0% | 45.5% | |
| Information Services Corp ($ISV) | 34.1% | 39.6% | 39.6% | 37.6% | |
| |
|---|
| Median (85 companies) | 8.1% | 8.5% | 9.0% | 10.6% | 10.4% |
|---|
| Covalon Technologies Ltd ($COV) | -125.7% | -93.1% | -16.7% | 30.2% | -6.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Neptune Technologies & Bioressources Inc ($NTB) | 6.0% | 4.7% | 73.6% | 84.6% | 119.0% |
| CanaDream Corp ($CDN) | 68.6% | 43.3% | 38.1% | 70.4% | 63.4% |
| Ceapro Inc ($CZO) | 2.2% | 3.9% | 35.3% | 52.0% | |
| Feronia Inc/Canada ($FRN) | 129.0% | 191.4% | 117.4% | 42.4% | |
| Microbix Biosystems Inc ($MBX) | 1.0% | 1.2% | 3.0% | 40.3% | 38.7% |
| |
|---|
| Median (86 companies) | 2.4% | 2.6% | 2.4% | 2.6% | 2.7% |
|---|
| Covalon Technologies Ltd ($COV) | 1.9% | 3.3% | 2.0% | 0.1% | 2.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Biosyent Inc ($RX) | 45.5% | 71.7% | 62.4% | 62.9% | |
| Information Services Corp ($ISV) | 56.0% | 71.8% | 72.8% | 58.9% | |
| Cipher Pharmaceuticals Inc ($CPH) | -22.9% | 21.8% | 81.4% | 44.6% | |
| Ceapro Inc ($CZO) | 69.9% | -33.5% | 15.5% | 43.5% | |
| Nobilis Health Corp ($NHC) | -20.2% | 49.4% | 29.7% | 39.0% | |
| |
|---|
| Median (86 companies) | 8.0% | 7.1% | 6.9% | 6.7% | 6.8% |
|---|
| Covalon Technologies Ltd ($COV) | -49.6% | -75.8% | -30.1% | 50.6% | -12.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Noble Iron Inc ($NIR) | | 25.5x | 12.9x | 227.3x | |
| Family Memorials Inc ($FAM) | | | | 15.2x | |
| Amica Mature Lifestyles Inc ($ACC) | 11.7x | 9.4x | 14.7x | 13.8x | 12.3x |
| Cott Corp ($BCB) | 2.6x | 2.0x | 2.2x | 13.4x | |
| CRH Medical Corp ($CRH) | -2.3x | -3.1x | -3.5x | 12.0x | |
| |
|---|
| Median (70 companies) | 1.8x | 2.6x | 2.2x | 2.7x | 1.5x |
|---|
| Covalon Technologies Ltd ($COV) | | | | -1.1x | |
