Silver Standard Resources Inc reports 162% CAPEX growth and 25.1% Revenue growth
25.02.2016 • About Silver Standard Resources Inc (
$SSO) • By InTwits
Silver Standard Resources Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Silver Standard Resources Inc doesn't have a profitable business model yet: 2015 ROIC is -9.5%
- Silver Standard Resources Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -7.9% for the sames years0
- Silver Standard Resources Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 23.0%. At the same time it's in pair with industry average of 26.4%.
- CAPEX is quite volatile: 62.5 in 2015, 23.9 in 2014, 36.0 in 2013, 62.0 in 2012, 65.4 in 2011
- The company has unprofitable business model: ROIC is at -9.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Silver Standard Resources Inc ($SSO) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 147.8 | 241.1 | 174.7 | 300.1 | 375.3 | 25.1% |
| Gross Profit | 51.9 | 58.1 | 5.2 | 36.2 | 18.8 | -48.0% |
| SG&A | 23.7 | 23.7 | 23.4 | 21.9 | 22.3 | 2.2% |
| EBITDA | 39.4 | 65.2 | -201.1 | -10.2 | 8.9 | -187.6% |
| Net Income | 80.1 | 55.3 | -230.0 | -126.4 | -124.3 | -1.7% |
Balance Sheet
|
|---|
| Cash | 329.1 | 366.9 | 415.7 | 184.6 | 211.9 | 14.7% |
| Short Term Debt | 0.0 | 135.8 | 0.0 | 5.9 | 4.3 | -27.8% |
| Long Term Debt | 125.3 | 0.0 | 187.1 | 197.1 | 208.1 | 5.6% |
Cash flow
|
|---|
| Capex | 65.4 | 62.0 | 36.0 | 23.9 | 62.5 | 162.0% |
Ratios
|
|---|
| Revenue growth | 31.7% | 63.1% | -27.6% | 71.8% | 25.1% | |
| EBITDA growth | 647.0% | 65.5% | -408.5% | -94.9% | -187.6% | |
| Gross Margin | 35.1% | 24.1% | 3.0% | 12.1% | 5.0% | -7.0% |
| EBITDA Margin | 26.6% | 27.0% | -115.1% | -3.4% | 2.4% | 5.8% |
| Net Income Margin | 54.2% | 22.9% | -131.7% | -42.1% | -33.1% | 9.0% |
| SG&A, % of revenue | 16.0% | 9.8% | 13.4% | 7.3% | 6.0% | -1.3% |
| CAPEX, % of revenue | 44.3% | 25.7% | 20.6% | 7.9% | 16.7% | 8.7% |
| ROIC | 2.0% | 1.8% | -23.4% | -6.2% | -9.5% | -3.3% |
| ROE | 8.4% | 5.4% | -26.4% | -19.9% | -24.2% | -4.3% |
| Net Debt/EBITDA | -5.2x | -3.5x | | | 0.1x | 0.1x |
Revenue and profitability
The company's Revenue surged on 25.1% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.8 pp from -3.4% to 2.4% in 2015.
Gross Margin decreased on 7.0 pp from 12.1% to 5.0% in 2015. SG&A as a % of Revenue decreased slightly on 1.3 pp from 7.3% to 6.0% in 2015.
Net Income marign increased on 9.0 pp from -42.1% to -33.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Silver Standard Resources Inc had CAPEX/Revenue of 16.7%. The company showed decline in CAPEX/Revenue of 9.1 pp from 25.7% in 2012 to 16.7% in 2015. For the last three years the average CAPEX/Revenue was 15.1%.The company has spent a lot to CAPEX (701% of EBITDA) to fuel its growth.
Return on investment
The company operates at negative ROIC (-9.47%) and ROE (-24.22%). ROIC decreased on 3.3 pp from -6.2% to -9.5% in 2015. ROE decreased on 4.3 pp from -19.9% to -24.2% in 2015.
Leverage (Debt)
Debt level is 0.1x Net Debt / EBITDA and 23.8x Debt / EBITDA. Net Debt / EBITDA increased0.1x from to 0.1x in 2015. Debt increased on 4.6% in 2015 while cash surged on 14.7% in 2015.
Management team
The company's CEO Paul Benson is a founder and has spent 3 years at the company. Gregory J Martin "Greg" is a The company's CFO. Gregory J Martin "Greg" has spent 6 years at the company.
Appendix 1: Peers in Basic Materials
Below we provide Silver Standard Resources Inc benchmarking against other companies in Basic Materials 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 |
|---|
| Northern Sun Mining Corp ($NSC) | -93.3% | 315.4% | -99.4% | 8,924.9% | |
| Turquoise Hill Resources Ltd ($TRQ) | | | -34.0% | 3,268.9% | -5.8% |
| Asian Mineral Resources Ltd ($ASN) | | | | 859.1% | |
| Ur-Energy Inc ($URE) | | | | 285.4% | |
| Nevsun Resources Ltd ($NSU) | | 3.3% | -72.5% | 256.5% | -35.7% |
| |
|---|
| Median (130 companies) | 39.5% | 8.0% | -5.0% | -1.1% | -5.1% |
|---|
| Silver Standard Resources Inc ($SSO) | | 63.1% | -27.6% | 71.8% | 25.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nevsun Resources Ltd ($NSU) | 90.3% | 89.9% | 94.8% | 95.5% | 82.3% |
| Franco-Nevada Corp ($FNV) | 84.6% | 86.1% | 85.0% | 83.5% | |
| Labrador Iron Ore Royalty Corp ($LIF) | 80.2% | 80.2% | 80.2% | 80.2% | |
| Lucara Diamond Corp ($LUC) | | 42.5% | 57.4% | 66.7% | 60.9% |
| Royal Gold Inc ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 30.1% | 32.0% | 21.8% | 17.6% | 15.5% |
|---|
| Silver Standard Resources Inc ($SSO) | 35.1% | 24.1% | 3.0% | 12.1% | 5.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Royal Gold Inc ($RGL) | 86.1% | 88.2% | 88.6% | 84.4% | 65.0% |
| Franco-Nevada Corp ($FNV) | 38.6% | 62.1% | 44.6% | 72.3% | |
| Silver Wheaton Corp ($SLW) | 84.8% | 82.6% | 75.3% | 69.6% | |
| Sandstorm Gold Ltd ($SSL) | 63.8% | 74.3% | 49.9% | 62.1% | |
| Nevsun Resources Ltd ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | 38.6% |
| |
|---|
| Median (137 companies) | 22.0% | 18.4% | 11.7% | 9.9% | 6.8% |
|---|
| Silver Standard Resources Inc ($SSO) | 26.6% | 27.0% | -115.1% | -3.4% | 2.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Barkerville Gold Mines Ltd ($BGM) | 123.7% | 38.5% | 49.9% | 7,166.9% | 3.2% |
| Marlin Gold Mining Ltd ($MLN) | | | | 508.8% | |
| Imperial Metals Corp ($III) | 28.2% | 69.2% | 185.7% | 280.2% | |
| Golden Minerals Co ($AUM) | 462.4% | 36.9% | 16.8% | 212.8% | 0.5% |
| Franco-Nevada Corp ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 23.9% | 26.3% | 25.5% | 16.3% | 15.7% |
|---|
| Silver Standard Resources Inc ($SSO) | 44.3% | 25.7% | 20.6% | 7.9% | 16.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lucara Diamond Corp ($LUC) | -7.1% | -2.9% | 41.3% | 54.7% | 39.6% |
| CanAf Group Inc ($CAF) | 74.9% | 37.0% | 65.2% | 37.6% | 13.8% |
| Nevsun Resources Ltd ($NSU) | 89.8% | 52.2% | 8.8% | 35.0% | 10.4% |
| Dynacor Gold Mines Inc ($DNG) | 45.6% | 62.8% | 50.9% | 31.3% | |
| Canfor Pulp Products Inc ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| |
|---|
| Median (143 companies) | 7.0% | 4.9% | 0.1% | 0.6% | -3.6% |
|---|
| Silver Standard Resources Inc ($SSO) | 2.0% | 1.8% | -23.4% | -6.2% | -9.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| VMS Ventures Inc ($VMS) | | | | 86.7x | 4.7x |
| Ur-Energy Inc ($URE) | | | | 55.1x | |
| Katanga Mining Ltd ($KAT) | 0.4x | 19.4x | 3.3x | 18.8x | |
| HudBay Minerals Inc ($HBM) | -2.8x | -4.8x | 2.0x | 14.0x | |
| Imperial Metals Corp ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (95 companies) | -0.0x | 0.3x | 0.8x | 0.9x | 1.4x |
|---|
