Espial Group Inc reports 33.8% EBITDA decline and 5.4 pp EBITDA Margin decline from 11.5% to 6.2%
25.02.2016 • About Espial Group Inc (
$ESP) • By InTwits
Espial Group Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Espial Group Inc doesn't have a profitable business model yet: 2015 ROIC is 1.5%
- Espial Group Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.4%. At the same time it's in pair with industry average of 1.8%.
- CAPEX is quite volatile: 0.53 in 2015, 0.38 in 2014, 0.030 in 2013, 0.21 in 2012, 0.18 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Espial Group Inc ($ESP) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 14.675 | 13.281 | 12.549 | 20.004 | 24.835 | 24.2% |
| Gross Profit | 11.428 | 10.295 | 10.250 | 15.706 | 18.462 | 17.5% |
| SG&A | | 5.808 | 5.911 | 6.835 | 8.466 | 23.9% |
| EBITDA | -0.616 | -0.889 | -2.055 | 2.309 | 1.528 | -33.8% |
| Net Income | -2.502 | -2.707 | -5.529 | 1.172 | 1.272 | 8.5% |
Balance Sheet
|
|---|
| Cash | 10.559 | 3.056 | 7.407 | 18.111 | 49.947 | 175.8% |
| Short Term Debt | 1.500 | 3.010 | 2.442 | 0.000 | 0.000 | |
| Long Term Debt | 3.094 | 3.257 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.181 | 0.211 | 0.030 | 0.383 | 0.533 | 39.0% |
Ratios
|
|---|
| Revenue growth | 10.2% | -9.5% | -5.5% | 59.4% | 24.2% | |
| EBITDA growth | -63.9% | 44.3% | 131.0% | -212.4% | -33.8% | |
| Gross Margin | 77.9% | 77.5% | 81.7% | 78.5% | 74.3% | -4.2% |
| EBITDA Margin | -4.2% | -6.7% | -16.4% | 11.5% | 6.2% | -5.4% |
| Net Income Margin | -17.1% | -20.4% | -44.1% | 5.9% | 5.1% | -0.7% |
| SG&A, % of revenue | | 43.7% | 47.1% | 34.2% | 34.1% | -0.1% |
| CAPEX, % of revenue | 1.2% | 1.6% | 0.2% | 1.9% | 2.1% | 0.2% |
| ROIC | -11.6% | -14.3% | -27.0% | 9.3% | 1.5% | -7.8% |
| ROE | -19.8% | -26.3% | -68.0% | 8.0% | 3.1% | -4.9% |
| Net Debt/EBITDA | | | | -7.8x | -32.7x | -24.8x |
Revenue and profitability
The company's Revenue surged on 24.2% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 10.1 pp from -34.3% to -24.1% in 2015.
Gross Margin decreased on 4.2 pp from 78.5% to 74.3% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased slightly on 0.74 pp from 5.9% to 5.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.1% in 2015. Espial Group Inc showed small growth in CAPEX/Revenue of 0.55 pp from 1.6% in 2012 to 2.1% in 2015. It's average level of CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at low ROIC (1.45%) and ROE (3.14%). ROIC decreased on 7.8 pp from 9.3% to 1.5% in 2015. ROE decreased on 4.9 pp from 8.0% to 3.1% in 2015.
Leverage (Debt)
The company has no debt. Cash surged on 176% in 2015.
Appendix 1: Peers in Technology
Below you can find Espial Group Inc benchmarking vs. other companies in Technology 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 |
|---|
| Mitel Networks Corp ($MNW) | | 3.8% | -5.7% | 91.4% | 4.9% |
| Redknee Solutions Inc ($RKN) | | -4.5% | 151.6% | 81.4% | -13.6% |
| Intrinsyc Technologies Corp ($ITC) | -19.0% | -26.8% | -21.7% | 70.8% | |
| iLOOKABOUT Corp ($ILA) | -7.6% | 19.6% | 8.9% | 58.8% | |
| Sylogist Ltd ($SYZ) | | -5.8% | 25.7% | 50.5% | 56.1% |
| |
|---|
| Median (34 companies) | 9.0% | 3.8% | 11.9% | 12.6% | 11.5% |
|---|
| Espial Group Inc ($ESP) | | -9.5% | -5.5% | 59.4% | 24.2% |
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% | 86.2% |
| Symbility Solutions Inc ($SY) | 82.1% | 80.6% | 79.9% | 81.0% | |
| Absolute Software Corp ($ABT) | 71.6% | 73.6% | 76.3% | 78.4% | 81.1% |
| Sandvine Corp ($SVC) | 74.3% | 67.5% | 74.1% | 76.8% | 77.8% |
| |
|---|
| Median (31 companies) | 49.7% | 52.4% | 48.8% | 51.1% | 55.8% |
|---|
| Espial Group Inc ($ESP) | 77.9% | 77.5% | 81.7% | 78.5% | 74.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi-LAN Inc ($WIN) | 26.5% | 40.9% | 12.2% | 56.2% | 53.2% |
| Computer Modelling Group Ltd ($CMG) | 51.5% | 53.8% | 52.2% | 51.5% | 50.8% |
| Open Text Corp ($OTC) | 27.1% | 26.5% | 29.1% | 30.0% | 31.8% |
| Sandvine Corp ($SVC) | 5.1% | 0.9% | 24.0% | 28.2% | 35.1% |
| Enghouse Systems Ltd ($ESL) | 24.8% | 25.4% | 23.6% | 24.7% | 21.9% |
| |
|---|
| Median (34 companies) | 8.9% | 8.5% | 5.8% | 5.8% | 17.1% |
|---|
| Espial Group Inc ($ESP) | -4.2% | -6.7% | -16.4% | 11.5% | 6.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Halogen Software Inc ($HGN) | | 4.9% | 9.0% | 8.4% | 2.9% |
| Intermap Technologies Corp ($IMP) | 0.4% | 1.0% | 3.2% | 7.4% | |
| Kinaxis Inc ($KXS) | 2.2% | 2.9% | 2.3% | 5.0% | 4.7% |
| BlackBerry Ltd ($BB) | 5.2% | 4.9% | 3.8% | 4.2% | 2.6% |
| ProntoForms Corp ($PFM) | 1.3% | 1.1% | 0.8% | 3.6% | |
| |
|---|
| Median (34 companies) | 1.3% | 1.4% | 1.5% | 1.2% | 1.4% |
|---|
| Espial Group Inc ($ESP) | 1.2% | 1.6% | 0.2% | 1.9% | 2.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kinaxis Inc ($KXS) | | | 61.8% | 63.6% | 44.0% |
| Computer Modelling Group Ltd ($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% | 38.5% |
| Sandvine Corp ($SVC) | -1.7% | -4.9% | 16.9% | 20.2% | 21.7% |
| |
|---|
| Median (34 companies) | 5.5% | 4.4% | -4.5% | 0.2% | 7.9% |
|---|
| Espial Group Inc ($ESP) | -11.6% | -14.3% | -27.0% | 9.3% | 1.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mad Catz Interactive Inc ($MCZ) | 0.7x | 32.2x | 1.2x | | 9.4x |
| Mitel Networks Corp ($MNW) | 4.9x | 3.7x | 3.8x | 2.6x | 6.2x |
| BlackBerry Ltd ($BB) | -0.3x | -0.5x | -2.3x | | 1.7x |
| Open Text Corp ($OTC) | 0.0x | 0.1x | 0.2x | 1.8x | 1.5x |
| SMART Technologies Inc ($SMA) | 1.4x | 2.1x | | 1.2x | 1.3x |
| |
|---|
| Median (18 companies) | -0.3x | -0.4x | -0.4x | -1.3x | -0.1x |
|---|
| Espial Group Inc ($ESP) | | | | -7.8x | -32.7x |
