EnerCare Inc reports 129% Net Income growth while 6.2 pp EBITDA Margin decline from 45.5% to 39.3%
07.03.2016 • About EnerCare Inc (
$ECI) • By InTwits
EnerCare Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 39.3% in 2015 vs. 45.5% in 2014 vs. 59.0% in 2011
- EnerCare Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 25.5%. At the same time it's a lot of higher than industry average of 8.3%.
- CAPEX is quite volatile: 10.7 in 2015, 19.7 in 2014, 9.7 in 2013, 4.3 in 2012, 13.0 in 2011
- The company has business model with low profitability: ROIC is at 7.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
EnerCare Inc ($ECI) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 243.9 | 275.1 | 298.8 | 361.9 | 563.6 | 55.7% |
| Gross Profit | 202.0 | 204.1 | 208.1 | 245.6 | 368.7 | 50.2% |
| SG&A | 38.4 | 43.6 | 44.0 | 71.0 | 144.3 | 103.3% |
| EBITDA | 144.0 | 145.3 | 152.5 | 164.7 | 221.4 | 34.4% |
| Net Income | 4.0 | -3.2 | 8.8 | 22.3 | 51.0 | 128.7% |
Balance Sheet
|
|---|
| Cash | 75.3 | 12.6 | 25.9 | 68.1 | 28.4 | -58.2% |
| Short Term Debt | 61.1 | 1.2 | 1.2 | 3.2 | 3.1 | -5.7% |
| Long Term Debt | 530.4 | 528.3 | 539.1 | 692.0 | 740.9 | 7.1% |
Cash flow
|
|---|
| Capex | 74.7 | 70.8 | 79.3 | 85.6 | 116.9 | 36.6% |
Ratios
|
|---|
| Revenue growth | 17.7% | 12.8% | 8.6% | 21.1% | 55.7% | |
| EBITDA growth | | 0.9% | 4.9% | 8.0% | 34.4% | |
| Gross Margin | 82.8% | 74.2% | 69.7% | 67.8% | 65.4% | -2.4% |
| EBITDA Margin | 59.0% | 52.8% | 51.0% | 45.5% | 39.3% | -6.2% |
| Net Income Margin | 1.6% | -1.2% | 3.0% | 6.2% | 9.0% | 2.9% |
| SG&A, % of revenue | 15.8% | 15.9% | 14.7% | 19.6% | 25.6% | 6.0% |
| CAPEX, % of revenue | 30.6% | 25.7% | 26.5% | 23.6% | 20.7% | -2.9% |
| ROIC | 4.5% | 5.4% | 7.1% | 5.9% | 7.5% | 1.6% |
| ROE | 3.0% | -2.9% | 10.6% | 8.1% | 11.7% | 3.6% |
| Net Debt/EBITDA | 3.6x | 3.6x | 3.4x | 3.8x | 3.2x | -0.6x |
Revenue and profitability
EnerCare Inc's Revenue surged on 55.7% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 6.2 pp from 45.5% to 39.3% in 2015.
Gross Margin decreased on 2.4 pp from 67.8% to 65.4% in 2015. SG&A as a % of Revenue increased on 6.0 pp from 19.6% to 25.6% in 2015.
Net Income marign increased on 2.9 pp from 6.2% to 9.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 20.7% in 2015. CAPEX/Revenue decreased on 5.0 pp from 25.7% in 2012 to 20.7% in 2015. For the last three years the average CAPEX/Revenue was 23.6%.The company invested a big chunk of EBITDA (52.8%) to CAPEX to fuel its growth.
Return on investment
The company operates at low ROIC (7.50%) and ROE (11.75%). ROIC increased slightly on 1.6 pp from 5.9% to 7.5% in 2015. ROE increased on 3.6 pp from 8.1% to 11.7% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.2x and Debt / EBITDA is 3.4x. Net Debt / EBITDA dropped on 0.6x from 3.8x to 3.2x in 2015. Debt increased on 7.0% in 2015 while cash dropped on 58.2% in 2015.
Management team
The company's CEO John A Macdonald is a founder and has spent 7 years at the company. The company's CFO Evelyn Louise Sutherland has spent 7 years at the company.
Appendix 1: Peers in Consumer, Non-cyclical
Below we provide EnerCare Inc 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 ($GDI) | | -38.8% | -72.9% | 218,969.1% | 18.7% |
| Cardiome Pharma Corp ($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 ($NHC) | 16.6% | 45.3% | 49.0% | 169.9% | |
| |
|---|
| Median (86 companies) | 17.4% | 8.1% | 5.3% | 12.7% | 7.0% |
|---|
| EnerCare Inc ($ECI) | | 12.8% | 8.6% | 21.1% | 55.7% |
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% | 92.7% |
| Heritage Global Inc ($HGP) | 99.5% | | | 95.7% | |
| Ritchie Bros Auctioneers Inc ($RBA) | 87.9% | 88.7% | 88.4% | 88.0% | 89.1% |
| Concordia Healthcare Corp ($CXR) | | | 79.4% | 86.0% | |
| |
|---|
| Median (74 companies) | 34.5% | 36.1% | 35.9% | 35.1% | 33.1% |
|---|
| EnerCare Inc ($ECI) | 82.8% | 74.2% | 69.7% | 67.8% | 65.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cipher Pharmaceuticals Inc ($CPH) | -50.0% | 40.6% | 71.4% | 63.7% | 12.8% |
| Merus Labs International Inc ($MSL) | | 32.9% | 64.7% | 46.2% | 61.5% |
| Valeant Pharmaceuticals International Inc ($VRX) | 37.0% | 30.6% | 27.8% | 45.6% | |
| Information Services Corp ($ISV) | 34.1% | 39.6% | 39.6% | 37.6% | |
| Concordia Healthcare Corp ($CXR) | | | 43.7% | 37.0% | |
| |
|---|
| Median (85 companies) | 7.7% | 7.4% | 8.7% | 10.6% | 10.6% |
|---|
| EnerCare Inc ($ECI) | 59.0% | 52.8% | 51.0% | 45.5% | 39.3% |
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 ($MBX) | 1.0% | 1.2% | 3.0% | 40.3% | 38.7% |
| |
|---|
| Median (86 companies) | 2.4% | 2.6% | 2.4% | 2.5% | 2.2% |
|---|
| EnerCare Inc ($ECI) | 30.6% | 25.7% | 26.5% | 23.6% | 20.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Biosyent Inc ($RX) | 45.5% | 71.7% | 62.4% | 62.9% | 48.2% |
| Information Services Corp ($ISV) | 56.0% | 71.8% | 72.8% | 58.9% | |
| Covalon Technologies Ltd ($COV) | -49.6% | -75.8% | -30.1% | 50.6% | -12.4% |
| Cipher Pharmaceuticals Inc ($CPH) | -22.9% | 21.8% | 81.4% | 44.6% | -0.1% |
| Ceapro Inc ($CZO) | 69.9% | -33.5% | 15.5% | 43.5% | |
| |
|---|
| Median (86 companies) | 8.0% | 7.1% | 6.7% | 7.3% | 6.5% |
|---|
| EnerCare Inc ($ECI) | 4.5% | 5.4% | 7.1% | 5.9% | 7.5% |
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 | 4.9x |
| CRH Medical Corp ($CRH) | -2.3x | -3.1x | -3.5x | 12.0x | 1.3x |
| |
|---|
| Median (70 companies) | 1.8x | 2.5x | 2.2x | 2.6x | 1.6x |
|---|
| EnerCare Inc ($ECI) | 3.6x | 3.6x | 3.4x | 3.8x | 3.2x |
