K-Bro Linen Inc CAPEX surged on 54.5% in 2015 and Revenue increased on 5.9%
10.03.2016 • About K-Bro Linen Inc (
$KBL) • By InTwits
K-Bro Linen Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- K-Bro Linen Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.9%. At the same time it's a lot of higher than industry average of 8.4%.
- CAPEX is quite volatile: 24.0 in 2015, 15.5 in 2014, 24.9 in 2013, 12.7 in 2012, 2.8 in 2011
- The company has highly profitable business model: ROIC is at 14.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
K-Bro Linen Inc ($KBL) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 116.9 | 126.3 | 131.2 | 136.4 | 144.5 | 5.9% |
| Gross Profit | 110.9 | | | | | |
| EBITDA | 19.9 | 24.5 | 23.3 | 26.2 | 27.0 | 2.7% |
| Net Income | 7.9 | 11.1 | 10.3 | 12.2 | 12.1 | -1.1% |
Balance Sheet
|
|---|
| Cash | 0.0 | 0.0 | 0.0 | 13.7 | 0.0 | -100.0% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 6.1 | 5.8 | 19.6 | 0.0 | 2.3 | |
Cash flow
|
|---|
| Capex | 2.8 | 12.7 | 24.9 | 15.5 | 24.0 | 54.5% |
Ratios
|
|---|
| Revenue growth | 12.3% | 8.1% | 3.9% | 4.0% | 5.9% | |
| EBITDA growth | 18.2% | 22.9% | -4.9% | 12.5% | 2.7% | |
| Gross Margin | 94.9% | | | | | 0.0% |
| EBITDA Margin | 17.1% | 19.4% | 17.8% | 19.2% | 18.6% | -0.6% |
| Net Income Margin | 6.8% | 8.8% | 7.9% | 8.9% | 8.3% | -0.6% |
| CAPEX, % of revenue | 2.4% | 10.0% | 19.0% | 11.4% | 16.6% | 5.2% |
| ROIC | 14.9% | 20.3% | 17.2% | 16.4% | 14.7% | -1.7% |
| ROE | 12.6% | 17.1% | 14.9% | 13.5% | 10.8% | -2.7% |
| Net Debt/EBITDA | 0.3x | 0.2x | 0.8x | -0.5x | 0.1x | 0.6x |
Revenue and profitability
K-Bro Linen Inc's Revenue increased on 5.9% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 65.9 pp from 50.0% to -15.9% in FY2015.
Net Income marign decreased slightly on 0.59 pp from 8.9% to 8.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 K-Bro Linen Inc had CAPEX/Revenue of 16.6%. The company's CAPEX/Revenue increased on 6.6 pp from 10.0% in 2012 to 16.6% in 2015. For the last three years the average CAPEX/Revenue was 15.7%.K-Bro Linen Inc maintained rich investment policy and has spent a big chunk of EBITDA (89.0%) to CAPEX.
Return on investment
The company operates at good ROIC (14.70%) while ROE is low (10.84%). ROIC decreased slightly on 1.7 pp from 16.4% to 14.7% in 2015. ROE decreased on 2.7 pp from 13.5% to 10.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.1x and Debt / EBITDA is 0.1x. Net Debt / EBITDA surged on 0.6x from -0.5x to 0.1x in 2015. Debt jumped while cash dropped on 100% in 2015.
Appendix 1: Peers in Consumer, Non-cyclical
Below we provide K-Bro Linen 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) | | -47.6% | 471.7% | 566.0% | -30.4% |
| 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 ($NHC) | 16.6% | 45.3% | 49.0% | 169.9% | |
| |
|---|
| Median (86 companies) | 17.4% | 9.3% | 6.7% | 13.2% | 11.9% |
|---|
| K-Bro Linen Inc ($KBL) | | 8.1% | 3.9% | 4.0% | 5.9% |
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 ($CXR) | | | 79.4% | 86.0% | |
| |
|---|
| Median (75 companies) | 34.5% | 37.4% | 36.1% | 35.6% | 35.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cipher Pharmaceuticals Inc ($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% | |
| EnerCare Inc ($ECI) | 59.0% | 52.8% | 51.0% | 45.5% | 39.3% |
| Information Services Corp ($ISV) | 34.1% | 39.6% | 39.6% | 37.6% | |
| |
|---|
| Median (85 companies) | 7.7% | 7.4% | 8.7% | 10.6% | 10.3% |
|---|
| K-Bro Linen Inc ($KBL) | 17.1% | 19.4% | 17.8% | 19.2% | 18.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Neptune Technologies & Bioressources Inc ($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% |
|---|
| K-Bro Linen Inc ($KBL) | 2.4% | 10.0% | 19.0% | 11.4% | 16.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Biosyent Inc ($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) | 7.4% | 6.3% | 6.7% | 6.7% | 6.5% |
|---|
| K-Bro Linen Inc ($KBL) | 14.9% | 20.3% | 17.2% | 16.4% | 14.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Noble Iron Inc ($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) | 1.9x | 2.8x | 2.2x | 2.7x | 1.8x |
|---|
| K-Bro Linen Inc ($KBL) | 0.3x | 0.2x | 0.8x | -0.5x | 0.1x |
