Information Services Corp reports 20.7 pp ROIC decline from 58.9% to 38.1% in 2015 and 6.4% EBITDA decline
15.03.2016 • About Information Services Corp (
$ISV) • By InTwits
Information Services Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Information Services Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's in pair with industry average of 6.7%.
- CAPEX is quite volatile: 1.8 in 2015, 1.5 in 2014, 0.46 in 2013, 2.4 in 2012, 1.9 in 2011
- The company has highly profitable business model: ROIC is at 38.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Information Services Corp ($ISV) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 70.816 | 75.216 | 79.131 | 80.459 | 78.318 | -2.7% |
| Gross Profit | 54.841 | 58.293 | 63.625 | 65.098 | 68.630 | 5.4% |
| EBITDA | 24.172 | 29.754 | 31.309 | 30.240 | 28.301 | -6.4% |
| Net Income | 17.218 | 21.240 | 76.981 | 18.360 | 15.917 | -13.3% |
Balance Sheet
|
|---|
| Cash | 18.957 | 21.138 | 27.614 | 33.581 | 36.571 | 8.9% |
| Short Term Debt | 11.081 | 9.935 | 0.000 | 0.000 | 1.500 | |
| Long Term Debt | 0.000 | 0.000 | 9.935 | 9.935 | 23.060 | 132.1% |
Cash flow
|
|---|
| Capex | 1.891 | 2.396 | 0.461 | 1.474 | 1.790 | 21.4% |
Ratios
|
|---|
| Revenue growth | 17.4% | 6.2% | 5.2% | 1.7% | -2.7% | |
| EBITDA growth | 8.8% | 23.1% | 5.2% | -3.4% | -6.4% | |
| Gross Margin | 77.4% | 77.5% | 80.4% | 80.9% | 87.6% | 6.7% |
| EBITDA Margin | 34.1% | 39.6% | 39.6% | 37.6% | 36.1% | -1.4% |
| Net Income Margin | 24.3% | 28.2% | 97.3% | 22.8% | 20.3% | -2.5% |
| CAPEX, % of revenue | 2.7% | 3.2% | 0.6% | 1.8% | 2.3% | 0.5% |
| ROIC | 56.0% | 71.8% | 72.8% | 58.9% | 38.1% | -20.7% |
| ROE | 90.8% | 101.7% | 149.6% | 22.1% | 18.4% | -3.7% |
| Net Debt/EBITDA | -0.3x | -0.4x | -0.6x | -0.8x | -0.4x | 0.4x |
Revenue and profitability
Information Services Corp's Revenue decreased on 2.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.7 pp from -4.3% to 0.47% in FY2015.
Gross Margin increased on 6.7 pp from 80.9% to 87.6% in 2015.
Net Income marign decreased on 2.5 pp from 22.8% to 20.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 2.3%. Information Services Corp's CAPEX/Revenue decreased slightly on 0.90 pp from 3.2% in 2012 to 2.3% in 2015. Average CAPEX/Revenue for the last three years was 1.6%.
Return on investment
The company operates at high and attractive ROIC (38.14%) while ROE is a bit lower (18.42%). ROIC dropped on 20.7 pp from 58.9% to 38.1% in 2015. ROE decreased on 3.7 pp from 22.1% to 18.4% in 2015.
Leverage (Debt)
Debt level is -0.4x Net Debt / EBITDA and 0.9x Debt / EBITDA. Net Debt / EBITDA surged on 0.4x from -0.8x to -0.4x in 2015. Debt jumped on 147% in 2015 while cash increased on 8.9% in 2015.
Appendix 1: Peers in Consumer, Non-cyclical
Below we provide Information Services Corp 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 ($NHC) | | 45.3% | 49.0% | 169.9% | 172.8% |
| |
|---|
| Median (86 companies) | 16.3% | 9.7% | 6.7% | 13.2% | 12.5% |
|---|
| Information Services Corp ($ISV) | | 6.2% | 5.2% | 1.7% | -2.7% |
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 ($CXR) | | | 79.4% | 86.0% | |
| |
|---|
| Median (74 companies) | 35.4% | 36.1% | 35.9% | 35.1% | 35.7% |
|---|
| Information Services Corp ($ISV) | 77.4% | 77.5% | 80.4% | 80.9% | 87.6% |
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 ($VRX) | 37.0% | 30.6% | 27.8% | 45.6% | 39.8% |
| EnerCare Inc ($ECI) | 59.0% | 52.8% | 51.0% | 45.5% | 39.3% |
| Concordia Healthcare Corp ($CXR) | | | 43.7% | 37.0% | |
| |
|---|
| Median (85 companies) | 7.5% | 7.4% | 8.7% | 10.6% | 10.8% |
|---|
| Information Services Corp ($ISV) | 34.1% | 39.6% | 39.6% | 37.6% | 36.1% |
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 ($MBX) | 1.0% | 1.2% | 3.0% | 40.3% | 38.7% |
| |
|---|
| Median (86 companies) | 2.3% | 2.6% | 2.4% | 2.6% | 2.3% |
|---|
| Information Services Corp ($ISV) | 2.7% | 3.2% | 0.6% | 1.8% | 2.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Biosyent Inc ($RX) | 45.5% | 71.7% | 62.4% | 62.9% | 48.2% |
| Covalon Technologies Ltd ($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% | |
| Nobilis Health Corp ($NHC) | -20.2% | 49.4% | 29.7% | 39.0% | 24.5% |
| |
|---|
| Median (86 companies) | 7.0% | 6.3% | 6.7% | 6.7% | 6.6% |
|---|
| Information Services Corp ($ISV) | 56.0% | 71.8% | 72.8% | 58.9% | 38.1% |
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 ($CRH) | -2.3x | -3.1x | -3.5x | 12.0x | 1.3x |
| |
|---|
| Median (70 companies) | 1.9x | 2.8x | 2.2x | 2.7x | 1.7x |
|---|
| Information Services Corp ($ISV) | -0.3x | -0.4x | -0.6x | -0.8x | -0.4x |
