Pason Systems Inc reports 113% Net Income decline and 10.8 pp EBITDA Margin decline from 50.1% to 39.3%
25.02.2016 • About Pason Systems Inc (
$PSI) • By InTwits
Pason Systems Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Pason Systems Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.6%. At the same time it's a lot of higher than industry average of 6.8%.
- CAPEX is quite volatile: 44.3 in 2015, 114 in 2014, 56.2 in 2013, 58.6 in 2012, 71.4 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Pason Systems Inc ($PSI) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 346.2 | 386.5 | 403.1 | 499.3 | 285.1 | -42.9% |
| Gross Profit | 213.8 | 245.5 | 250.8 | 323.9 | 167.6 | -48.3% |
| SG&A | 21.3 | 19.9 | 18.6 | 18.8 | 16.5 | -12.2% |
| EBITDA | 173.8 | 179.4 | 172.4 | 250.2 | 112.0 | -55.2% |
| Net Income | 86.2 | 39.9 | 23.7 | 112.1 | -14.6 | -113.0% |
Balance Sheet
|
|---|
| Cash | 105.0 | 138.3 | 78.0 | 144.9 | 195.8 | 35.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 71.4 | 58.6 | 56.2 | 113.7 | 44.3 | -61.1% |
Ratios
|
|---|
| Revenue growth | 38.7% | 11.7% | 4.3% | 23.9% | -42.9% | |
| EBITDA growth | 70.9% | 3.2% | -3.9% | 45.1% | -55.2% | |
| Gross Margin | 61.8% | 63.5% | 62.2% | 64.9% | 58.8% | -6.1% |
| EBITDA Margin | 50.2% | 46.4% | 42.8% | 50.1% | 39.3% | -10.8% |
| Net Income Margin | 24.9% | 10.3% | 5.9% | 22.5% | -5.1% | -27.6% |
| SG&A, % of revenue | 6.2% | 5.2% | 4.6% | 3.8% | 5.8% | 2.0% |
| CAPEX, % of revenue | 20.6% | 15.2% | 13.9% | 22.8% | 15.5% | -7.2% |
| ROIC | 33.5% | 30.0% | 29.7% | 41.0% | 6.0% | -35.0% |
| ROE | 25.5% | 10.8% | 6.4% | 26.4% | -3.0% | -29.4% |
| Net Debt/EBITDA | -0.6x | -0.8x | -0.5x | -0.6x | -1.7x | -1.2x |
Revenue and profitability
Pason Systems Inc's Revenue dropped on 42.9% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.4 pp from 7.5% to 16.9% in 2015.
Gross Margin decreased on 6.1 pp from 64.9% to 58.8% in 2015. SG&A as a % of Revenue increased on 2.0 pp from 3.8% to 5.8% in 2015.
Net Income marign dropped on 27.6 pp from 22.5% to -5.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 15.5%. The company's CAPEX/Revenue showed almost no change from 2012 to 2015. Average CAPEX/Revenue for the last three years was 17.4%.
Return on investment
The company operates at low but positive ROIC (6.04%) and negative ROE (-3.00%). ROIC dropped on 35.0 pp from 41.0% to 6.0% in 2015. ROE dropped on 29.4 pp from 26.4% to -3.0% in 2015.
Leverage (Debt)
The company has no debt. Cash jumped on 35.2% in 2015.
Management team
Pason Systems Inc's CEO Marcel Kessler is a founder and has spent 7 years at the company. Jon Faber is a The company's CFO. Jon Faber has spent 4 years at the company.
Appendix 1: Peers in Energy
Below we provide Pason Systems Inc benchmarking against other companies in Energy 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 |
|---|
| Petro Rio SA ($PRJ) | -36.3% | -32.1% | -34.9% | 10,977.1% | |
| ONEnergy Inc ($OEG) | | | | 6,002.6% | |
| Sterling Resources Ltd ($SLG) | | -94.8% | 4,514.9% | 2,244.4% | |
| Ikkuma Resources Corp ($IKM) | 22.5% | 17.0% | -4.5% | 1,231.1% | |
| Spartan Energy Corp ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 38.6% | 9.5% | 17.1% | 17.6% | -24.0% |
|---|
| Pason Systems Inc ($PSI) | | 11.7% | 4.3% | 23.9% | -42.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TransAlta Renewables Inc ($RNW) | | | 94.4% | 94.5% | 94.5% |
| Advantage Oil & Gas Ltd ($AAV) | 70.5% | 62.0% | 84.5% | 92.5% | |
| Freehold Royalties Ltd ($FRU) | 91.7% | 90.4% | 89.0% | 90.2% | |
| MEG Energy Corp ($MEG) | 85.5% | 86.8% | 87.4% | 87.6% | 84.1% |
| NXT Energy Solutions Inc ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 30.7% |
|---|
| Pason Systems Inc ($PSI) | 61.8% | 63.5% | 62.2% | 64.9% | 58.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Seven Generations Energy Ltd ($VII) | | 56.9% | 54.0% | 106.0% | |
| Tourmaline Oil Corp ($TOU) | 67.4% | 67.9% | 80.0% | 97.6% | |
| Bonavista Energy Corp ($BNP) | 63.8% | 64.6% | 62.6% | 91.6% | 54.5% |
| Bellatrix Exploration Ltd ($BXE) | 42.7% | 58.6% | 83.6% | 89.6% | |
| Advantage Oil & Gas Ltd ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | |
| |
|---|
| Median (159 companies) | 24.7% | 25.0% | 30.5% | 28.9% | 5.9% |
|---|
| Pason Systems Inc ($PSI) | 50.2% | 46.4% | 42.8% | 50.1% | 39.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oryx Petroleum Corp Ltd ($OXC) | | | | 1,997.8% | |
| Petroshale Inc ($PSH) | 30.6% | | 346.6% | 865.9% | |
| Toro Oil & Gas Ltd ($TOO) | 192.4% | 139.0% | 39.2% | 808.7% | |
| Athabasca Oil Corp ($ATH) | 176.2% | 2,426.4% | 596.6% | 504.7% | |
| BNK Petroleum Inc ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 43.3% | 50.0% | 39.2% | 48.8% | 21.5% |
|---|
| Pason Systems Inc ($PSI) | 20.6% | 15.2% | 13.9% | 22.8% | 15.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sea Dragon Energy Inc ($SDX) | -10.1% | 8.1% | 21.8% | 32.9% | |
| Raging River Exploration Inc ($RRX) | | | | 29.1% | |
| High Arctic Energy Services Inc ($HWO) | 27.0% | 31.4% | 26.3% | 24.9% | |
| Rooster Energy Ltd ($COQ) | | | | 22.9% | |
| ARC Resources Ltd ($ARX) | 6.5% | 3.2% | 7.9% | 20.7% | -6.0% |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.5% | 5.0% | -7.1% |
|---|
| Pason Systems Inc ($PSI) | 33.5% | 30.0% | 29.7% | 41.0% | 6.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Veresen Inc ($VSN) | 22.3x | 16.2x | 14.7x | 30.3x | |
| Lightstream Resources Ltd ($LTS) | | 2.0x | | 27.8x | |
| Petroshale Inc ($PSH) | 0.1x | | | 21.7x | |
| Connacher Oil and Gas Ltd ($CLC) | 9.7x | 16.7x | 8.8x | 17.1x | |
| Pengrowth Energy Corp ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.6x | 1.5x | 1.4x | 4.8x |
|---|
| Pason Systems Inc ($PSI) | -0.6x | -0.8x | -0.5x | -0.6x | -1.7x |
