Canyon Services Group Inc Net Income dropped on 226% in 2015 and EBITDA Margin dropped on 13.7 pp from 19.9% to 6.1%
03.03.2016 • About Canyon Services Group Inc (
$FRC) • By InTwits
Canyon Services Group Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Canyon Services Group Inc doesn't have a profitable business model yet: 2015 ROIC is -7.5%
- EBITDA Margin is quite volatile: 6.1% in 2015, 19.9% in 2014, 9.4% in 2013, 29.5% in 2012, 41.1% in 2011
- Canyon Services Group Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 15.6%. At the same time it's a lot of higher than industry average of 6.4%.
- CAPEX is quite volatile: 28.9 in 2015, 113 in 2014, 14.8 in 2013, 69.9 in 2012, 101 in 2011
- The company has unprofitable business model: ROIC is at -7.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Canyon Services Group Inc ($FRC) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 372.1 | 353.1 | 299.6 | 591.0 | 404.0 | -31.6% |
| Gross Profit | 154.0 | 97.3 | 19.8 | 104.8 | 3.5 | -96.6% |
| SG&A | 23.6 | 23.1 | 24.5 | 36.6 | 33.3 | -9.0% |
| EBITDA | 152.8 | 104.2 | 28.3 | 117.5 | 24.8 | -78.9% |
| Net Income | 95.3 | 54.4 | -4.4 | 49.1 | -62.1 | -226.4% |
Balance Sheet
|
|---|
| Cash | 42.5 | 22.6 | 21.3 | 20.6 | 3.1 | -85.2% |
| Short Term Debt | 1.6 | 2.1 | 2.7 | 14.3 | 3.9 | -73.0% |
| Long Term Debt | 3.5 | 3.5 | 3.1 | 36.2 | 64.8 | 79.0% |
Cash flow
|
|---|
| Capex | 101.3 | 69.9 | 14.8 | 112.7 | 28.9 | -74.4% |
Ratios
|
|---|
| Revenue growth | 72.4% | -5.1% | -15.2% | 97.3% | -31.6% | |
| EBITDA growth | 80.5% | -31.8% | -72.8% | 315.1% | -78.9% | |
| Gross Margin | 41.4% | 27.5% | 6.6% | 17.7% | 0.9% | -16.8% |
| EBITDA Margin | 41.1% | 29.5% | 9.4% | 19.9% | 6.1% | -13.7% |
| Net Income Margin | 25.6% | 15.4% | -1.5% | 8.3% | -15.4% | -23.7% |
| SG&A, % of revenue | 6.3% | 6.5% | 8.2% | 6.2% | 8.2% | 2.0% |
| CAPEX, % of revenue | 27.2% | 19.8% | 5.0% | 19.1% | 7.1% | -11.9% |
| ROIC | 44.6% | 21.1% | -1.4% | 16.2% | -7.5% | -23.7% |
| ROE | 35.5% | 16.7% | -1.4% | 13.6% | -16.2% | -29.8% |
| Net Debt/EBITDA | -0.2x | -0.2x | -0.5x | 0.3x | 2.6x | 2.4x |
Revenue and profitability
The company's Revenue dropped on 31.6% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 13.7 pp from 19.9% to 6.1% in 2015.
Gross Margin dropped on 16.8 pp from 17.7% to 0.88% in 2015. SG&A as a % of Revenue increased on 2.0 pp from 6.2% to 8.2% in 2015.
Net Income marign dropped on 23.7 pp from 8.3% to -15.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
Canyon Services Group Inc's CAPEX/Revenue was 7.1% in 2015. Canyon Services Group Inc's CAPEX/Revenue dropped on 12.7 pp from 19.8% in 2012 to 7.1% in 2015. For the last three years the average CAPEX/Revenue was 10.4%.Canyon Services Group Inc has spent a lot to CAPEX (116% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-7.46%) and ROE (-16.17%). ROIC dropped on 23.7 pp from 16.2% to -7.5% in 2015. ROE dropped on 29.8 pp from 13.6% to -16.2% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is 2.8x. Net Debt / EBITDA surged on 2.4x from 0.3x to 2.6x in 2015. Debt jumped on 35.9% in 2015 while cash dropped on 85.2% in 2015.
Management team
The company's CEO is Bradley P D Fedora "Brad". Bradley P D Fedora "Brad" is a founder and has 9 years tenure at the company. The company's CFO Barry J O'Brien has spent 11 years at the company.
Appendix 1: Peers in Energy
Below you can find Canyon Services Group Inc benchmarking vs. other companies in Energy 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 |
|---|
| 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 39.6% | 10.4% | 17.1% | 17.6% | -27.7% |
|---|
| Canyon Services Group Inc ($FRC) | | -5.1% | -15.2% | 97.3% | -31.6% |
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% | 88.5% |
| Freehold Royalties Ltd ($FRU) | 91.7% | 90.4% | 89.0% | 90.2% | 86.3% |
| MEG Energy Corp ($MEG) | 85.5% | 86.8% | 87.4% | 87.6% | 84.1% |
| NXT Energy Solutions Inc ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.6% | 30.3% | 30.7% |
|---|
| Canyon Services Group Inc ($FRC) | 41.4% | 27.5% | 6.6% | 17.7% | 0.9% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (159 companies) | 24.7% | 25.0% | 31.1% | 29.6% | 12.6% |
|---|
| Canyon Services Group Inc ($FRC) | 41.1% | 29.5% | 9.4% | 19.9% | 6.1% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 43.3% | 50.0% | 39.2% | 48.8% | 25.4% |
|---|
| Canyon Services Group Inc ($FRC) | 27.2% | 19.8% | 5.0% | 19.1% | 7.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pason Systems Inc ($PSI) | 33.5% | 30.0% | 29.7% | 41.0% | 6.0% |
| Sea Dragon Energy Inc ($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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.6% | 5.0% | -5.1% |
|---|
| Canyon Services Group Inc ($FRC) | 44.6% | 21.1% | -1.4% | 16.2% | -7.5% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.6x | 1.5x | 1.4x | 3.2x |
|---|
| Canyon Services Group Inc ($FRC) | -0.2x | -0.2x | -0.5x | 0.3x | 2.6x |
