Hardwoods Distribution Inc's growth is outstanding: revenue grew 23.1% and EBITDA 41.3% annually over the last three years
18.03.2016 • About Hardwoods Distribution Inc (
$HWD) • By InTwits
Pay attention to Hardwoods Distribution Inc as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Hardwoods Distribution Inc showed fast growth in the last financial year. The company's revenue surged on 25.4% in FY2015. At the same time Hardwoods Distribution Inc well managed its profitability and showed even faster growth in EBITDA of 36.6% for the same period.
If we look for the longer period Hardwoods Distribution Inc showed fast revenue growth of 23.1% from 2012 to 2015 annually. EBITDA surged on 41.3% from 2012 to 2015 annually.
Hardwoods Distribution Inc ($HWD) financials for the last 5 years
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 230 | 306 | 371 | 456 | 572 |
|---|
| Revenue growth, % | | 33.1% | 21.3% | 22.8% | 25.4% |
|---|
| Gross margin, % | 17.7% | 17.6% | 18.2% | 17.3% | 17.4% |
|---|
| SG&A, % | 12.0% | 11.1% | 10.4% | 9.53% | 11.8% |
|---|
| EBITDA | 6 | 12 | 21 | 25 | 35 |
|---|
| EBITDA growth, % | | 106.9% | 73.1% | 19.2% | 36.6% |
|---|
| EBITDA margin, % | 2.60% | 4.03% | 5.76% | 5.59% | 6.09% |
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| Net Income | 6 | 6 | 13 | 14 | 20 |
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| Net Income margin, % | 2.64% | 2.02% | 3.52% | 3.08% | 3.52% |
|---|
| |
| CAPEX | 0 | 1 | 1 | 2 | 2 |
|---|
| CAPEX/Revenue, % | 0.165% | 0.277% | 0.254% | 0.331% | 0.324% |
|---|
| Debt | 21 | 26 | 30 | 37 | 31 |
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| Cash | 0 | 0 | 0 | 0 | 0 |
|---|
| Net Debt/EBITDA | 3.5x | 2.1x | 1.4x | 1.5x | 0.9x |
|---|
| |
| ROIC, % | | 13.1% | 19.9% | 18.8% | 20.9% |
|---|
| ROE, % | | 8.4% | 15.7% | 14.1% | 16.0% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. The company's EBITDA margin increased on 0.500 pp from 5.60% to 6.10% in 2015. If we look for the longer period the company showed fast EBITDA margin growth of 2.10 pp from 4% in 2012 to 6.10% in 2015.
Hardwoods Distribution Inc shows attractive ROIC at 20.9% for the last 12 months which assumes stable development model. Three years ago it was lower at 13.1%. For the last three years the average ROIC was 19.9%.
Net Income margin surged on 0.400 pp from 3.10% to 3.50% in 2015. If we look for the longer period Net Income margin surged on 1.50 pp from 2% in 2012 to 3.50% in 2015.
Hardwoods Distribution Inc operates at ROE of 16.0%. Average ROE for the last three years was 15.3%.
Capital expenditures (CAPEX)
Hardwoods Distribution Inc's CAPEX/Revenue was 0.324% in FY2015. Hardwoods Distribution Inc's CAPEX/Revenue surged on 0.0466 pp from 0.277% in 2012 to 0.324% in 2015. Average CAPEX/Revenue for the last three years was 0.303%.
Leverage (Debt)
Hardwoods Distribution Inc has low debt level at 0.9x Net Debt/EBITDA - at the same time with high growth. In the longer period leverage dropped on 1.21x from 2.09x in 2012 to 0.88x in 2015.
Valuation vs. comparable companies
At the end of trading day today Hardwoods Distribution Inc traded at 8.8x EV/EBITDA which is 68.8% lower than 28.3x Consumer, Cyclical peer group avearge calculated on the basis of 111 companies. At the end of trading day today Hardwoods Distribution Inc traded at 13.7x P/E which is 28.6% lower than 19.2x Consumer, Cyclical peer group avearge calculated on the basis of 26 companies.
Peers in Consumer, Cyclical
Below you can find Hardwoods Distribution Inc benchmarking vs. other companies in Consumer, Cyclical 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Amaya Inc ($AYA) | 216.4% | 311.5% | 85.2% | 254.0% | |
| Partner Jet Corp ($PJT) | -19.9% | -15.2% | 1.2% | 119.7% | |
| Kelso Technologies Inc ($KLS) | 80.5% | 577.5% | 487.8% | 81.4% | |
| XPEL Technologies Corp ($DAP.U) | 46.3% | 76.6% | 67.7% | 65.5% | |
| Holloway Lodging Corp ($HLC) | | -24.6% | 2.7% | 62.7% | 13.5% |
| |
|---|
| Median (68 companies) | 16.1% | 5.3% | 4.9% | 7.0% | 4.0% |
|---|
| Hardwoods Distribution Inc ($HWD) | | 33.1% | 21.3% | 22.8% | 25.4% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Restaurant Brands International Inc ($QSR) | | | 69.7% | 87.0% | 42.9% |
| Imvescor Restaurant Group Inc ($IRG) | 96.2% | 94.2% | 89.7% | 84.9% | 84.3% |
| DEQ Systems Corp ($DEQ) | 74.3% | 77.5% | 78.4% | 84.7% | |
| Cara Operations Ltd ($CAO) | | | 79.2% | 78.9% | 78.4% |
| Second Cup Ltd/The ($SCU) | 91.1% | 86.6% | 85.1% | 72.7% | 81.1% |
| |
|---|
| Median (60 companies) | 37.9% | 36.5% | 34.1% | 35.4% | 35.4% |
|---|
| Hardwoods Distribution Inc ($HWD) | 17.7% | 17.6% | 18.2% | 17.3% | 17.4% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Westshore Terminals Investment Corp ($WTE) | | 49.7% | 65.9% | 60.9% | 59.6% |
| Gamehost Inc ($GH) | 44.2% | 46.1% | 45.7% | 45.9% | 42.8% |
| Great Canadian Gaming Corp ($GC) | 34.1% | 16.8% | 41.1% | 40.1% | 36.6% |
| Amaya Inc ($AYA) | -5.7% | 7.2% | 38.2% | 39.3% | |
| MTY Food Group Inc ($MTY) | 32.2% | 36.3% | 38.7% | 37.0% | 34.9% |
| |
|---|
| Median (66 companies) | 8.7% | 8.1% | 9.8% | 10.1% | 10.1% |
|---|
| Hardwoods Distribution Inc ($HWD) | 2.6% | 4.0% | 5.8% | 5.6% | 6.1% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 32.5% | |
| WestJet Airlines Ltd ($WJA) | 3.9% | 7.9% | 19.5% | 18.6% | 22.5% |
| Exchange Income Corp ($EIF) | 8.2% | 7.9% | 15.8% | 15.5% | 15.4% |
| Holloway Lodging Corp ($HLC) | 3.4% | 8.2% | 6.7% | 14.8% | 26.7% |
| Kelso Technologies Inc ($KLS) | 79.2% | 0.4% | 0.7% | 13.5% | |
| |
|---|
| Median (69 companies) | 2.9% | 2.7% | 2.9% | 2.5% | 3.1% |
|---|
| Hardwoods Distribution Inc ($HWD) | 0.2% | 0.3% | 0.3% | 0.3% | 0.3% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Partner Jet Corp ($PJT) | -30.7% | -51.6% | -50.8% | 85.1% | |
| Kelso Technologies Inc ($KLS) | -121.3% | | | 48.8% | |
| XPEL Technologies Corp ($DAP.U) | 52.9% | 54.7% | 57.5% | 43.2% | |
| Westshore Terminals Investment Corp ($WTE) | | 24.0% | 37.8% | 35.0% | 38.3% |
| Iplayco Corp Ltd ($IPC) | -35.4% | 23.0% | 58.5% | 33.6% | 10.9% |
| |
|---|
| Median (69 companies) | 10.6% | 9.7% | 10.1% | 9.7% | 11.0% |
|---|
| Hardwoods Distribution Inc ($HWD) | | 13.1% | 19.9% | 18.8% | 20.9% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Mountain China Resorts Holding Ltd ($MCG) | | | | 317.1x | |
| Restaurant Brands International Inc ($QSR) | | | 3.8x | 33.6x | 5.8x |
| Allied Hotel Properties Inc ($AHP) | | | | 21.3x | |
| Hudson's Bay Co ($HBC) | 8.7x | 3.8x | 3.6x | 19.1x | 3.6x |
| Amaya Inc ($AYA) | | 17.9x | 1.8x | 13.5x | |
| |
|---|
| Median (58 companies) | 1.3x | 1.2x | 1.8x | 2.1x | 1.4x |
|---|
| Hardwoods Distribution Inc ($HWD) | 3.5x | 2.1x | 1.4x | 1.5x | 0.9x |
