Enterprise Group Inc reports 454% Net Income decline and 23.9% Revenue decline
28.03.2016 • About Enterprise Group Inc (
$E) • By InTwits
Enterprise Group Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Enterprise Group Inc doesn't have a profitable business model yet: 2015 ROIC is -2.8%
- EBITDA Margin is quite volatile: 9.5% in 2015, 23.6% in 2014, 22.8% in 2013, 24.1% in 2012, 8.7% in 2011
- Enterprise Group Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.6%. At the same time it's a lot of higher than industry average of 6.1%.
- CAPEX is quite volatile: 4.2 in 2015, 26.0 in 2014, 9.5 in 2013, 3.2 in 2012, 0.64 in 2011
- The company has unprofitable business model: ROIC is at -2.8%
- It operates with high leverage: Net Debt/EBITDA is 7.1x while industry average is 2.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Enterprise Group Inc ($E) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 17.884 | 18.504 | 34.849 | 79.629 | 60.623 | -23.9% |
| Gross Profit | 3.451 | 6.198 | 15.312 | 32.592 | 12.042 | -63.1% |
| SG&A | | | | | 4.151 | |
| EBITDA | 1.562 | 4.457 | 7.932 | 18.776 | 5.734 | -69.5% |
| Net Income | 0.079 | 2.489 | 5.782 | 5.731 | -20.307 | -454.3% |
Balance Sheet
|
|---|
| Cash | 0.357 | 1.152 | 4.568 | 9.888 | 2.000 | -79.8% |
| Short Term Debt | 3.535 | 1.022 | 2.510 | 11.001 | 4.545 | -58.7% |
| Long Term Debt | 1.254 | 12.372 | 23.813 | 44.058 | 37.962 | -13.8% |
Cash flow
|
|---|
| Capex | 0.638 | 3.226 | 9.465 | 26.024 | 4.223 | -83.8% |
Ratios
|
|---|
| Revenue growth | 14.5% | 3.5% | 88.3% | 128.5% | -23.9% | |
| EBITDA growth | -202.4% | 185.4% | 78.0% | 136.7% | -69.5% | |
| Gross Margin | 19.3% | 33.5% | 43.9% | 40.9% | 19.9% | -21.1% |
| EBITDA Margin | 8.7% | 24.1% | 22.8% | 23.6% | 9.5% | -14.1% |
| Net Income Margin | 0.4% | 13.4% | 16.6% | 7.2% | -33.5% | -40.7% |
| SG&A, % of revenue | | | | | 6.8% | 6.8% |
| CAPEX, % of revenue | 3.6% | 17.4% | 27.2% | 32.7% | 7.0% | -25.7% |
| ROIC | 2.3% | 15.0% | 12.6% | 11.5% | -2.8% | -14.3% |
| ROE | 0.9% | 23.8% | 27.8% | 10.3% | -27.7% | -38.0% |
| Net Debt/EBITDA | 2.8x | 2.7x | 2.7x | 2.4x | 7.1x | 4.7x |
Revenue and profitability
Enterprise Group Inc's Revenue dropped on 23.9% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.0 pp from 23.1% to 27.0% in FY2015.
Gross Margin dropped on 21.1 pp from 40.9% to 19.9% in 2015.
Net Income marign dropped on 40.7 pp from 7.2% to -33.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Enterprise Group Inc had CAPEX/Revenue of 7.0%. CAPEX/Revenue dropped on 10.5 pp from 17.4% in 2012 to 7.0% in 2015. It's average level of CAPEX/Revenue for the last three years was 22.3%.Battling declining revenue the company invested a large share of EBITDA (73.7%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-2.81%) and ROE (-27.72%). ROIC dropped on 14.3 pp from 11.5% to -2.8% in 2015. ROE dropped on 38.0 pp from 10.3% to -27.7% in 2015.
Leverage (Debt)
Debt level is 7.1x Net Debt / EBITDA and 7.4x Debt / EBITDA. Net Debt / EBITDA jumped on 4.7x from 2.4x to 7.1x in 2015. Debt dropped on 22.8% in 2015 while cash dropped on 79.8% in 2015.
Appendix 1: Peers in Industrial
Below you can find Enterprise Group Inc benchmarking vs. other companies in Industrial 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 |
|---|
| Electrovaya Inc ($EFL) | | -4.0% | -71.2% | 160.5% | 123.8% |
| WSP Global Inc ($WSP) | | 92.9% | 60.3% | 44.0% | 108.9% |
| CEMATRIX Corp ($CVX) | | 9.2% | -5.6% | 7.9% | 76.5% |
| Lumenpulse Inc ($LMP) | | 56.7% | 33.9% | 47.0% | 61.8% |
| Cargojet Inc ($CJT.A) | | 2.0% | 3.9% | 9.7% | 50.2% |
| |
|---|
| Median (75 companies) | 0.7% | 11.5% | 4.9% | 9.1% | 9.7% |
|---|
| Enterprise Group Inc ($E) | | 3.5% | 88.3% | 128.5% | -23.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| WSP Global Inc ($WSP) | 81.1% | 81.1% | 83.2% | 81.0% | 74.0% |
| Pure Technologies Ltd ($PUR) | 75.7% | 77.9% | 78.0% | 77.5% | 75.6% |
| Alarmforce Industries Inc ($AF) | 76.4% | 75.0% | 76.5% | 72.2% | 69.2% |
| Epicore BioNetworks Inc ($EBN) | 59.0% | 60.8% | 63.2% | 64.1% | 58.1% |
| FLYHT Aerospace Solutions Ltd ($FLY) | 54.0% | 57.2% | 59.2% | 62.9% | |
| |
|---|
| Median (88 companies) | 23.4% | 23.0% | 23.3% | 22.6% | 24.0% |
|---|
| Enterprise Group Inc ($E) | 19.3% | 33.5% | 43.9% | 40.9% | 19.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Canadian National Railway Co ($CNR) | 46.3% | 46.5% | 45.9% | 46.8% | 50.9% |
| Canadian Pacific Railway Ltd ($CP) | 28.1% | 26.1% | 32.4% | 43.7% | 48.9% |
| Vitreous Glass Inc ($VCI) | 29.0% | 31.4% | 32.2% | 37.8% | 39.0% |
| Evertz Technologies Ltd ($ET) | 37.2% | 29.6% | 29.1% | 23.0% | 27.0% |
| Badger Daylighting Ltd ($BAD) | 27.2% | 25.7% | 25.9% | 27.9% | 24.6% |
| |
|---|
| Median (71 companies) | 8.1% | 9.2% | 8.3% | 7.2% | 9.5% |
|---|
| Enterprise Group Inc ($E) | 8.7% | 24.1% | 22.8% | 23.6% | 9.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newalta Corp ($NAL) | 17.2% | 21.7% | 34.5% | 35.1% | 42.0% |
| Cargojet Inc ($CJT.A) | 6.8% | 7.0% | 6.3% | 54.1% | 41.3% |
| Algoma Central Corp ($ALC) | 6.6% | 15.9% | 7.3% | 5.0% | 27.4% |
| Canadian Pacific Railway Ltd ($CP) | 21.3% | 20.2% | 20.2% | 21.9% | 22.7% |
| Canadian National Railway Co ($CNR) | 18.0% | 17.4% | 18.7% | 18.9% | 21.5% |
| |
|---|
| Median (74 companies) | 2.4% | 3.0% | 3.5% | 3.1% | 3.9% |
|---|
| Enterprise Group Inc ($E) | 3.6% | 17.4% | 27.2% | 32.7% | 7.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vitreous Glass Inc ($VCI) | 26.1% | 30.5% | 32.3% | 48.3% | 51.0% |
| Pacific Safety Products Inc ($PSP) | -19.0% | -1.5% | -11.5% | 3.7% | 38.2% |
| CEMATRIX Corp ($CVX) | 15.7% | 6.4% | -2.4% | -6.7% | 30.4% |
| IWG Technologies Inc ($IWG) | 13.4% | 17.0% | 36.3% | 23.4% | 27.2% |
| Epicore BioNetworks Inc ($EBN) | 24.8% | 28.1% | 16.1% | 32.5% | 26.3% |
| |
|---|
| Median (75 companies) | 9.1% | 9.3% | 8.5% | 8.5% | 10.6% |
|---|
| Enterprise Group Inc ($E) | 2.3% | 15.0% | 12.6% | 11.5% | -2.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Conifex Timber Inc ($CFF) | | | 2.7x | 6.1x | 35.9x |
| Ag Growth International Inc ($AFN) | 2.4x | 2.9x | -0.1x | 2.1x | 14.1x |
| Cargojet Inc ($CJT.A) | 1.8x | 1.5x | 1.5x | 31.5x | 12.9x |
| Progressive Waste Solutions Ltd ($BIN) | 2.5x | 4.5x | 3.3x | 2.9x | 10.6x |
| Finning International Inc ($FTT) | 1.8x | 2.3x | 1.8x | 1.4x | 9.4x |
| |
|---|
| Median (64 companies) | 1.1x | 1.5x | 1.4x | 1.2x | 1.2x |
|---|
| Enterprise Group Inc ($E) | 2.8x | 2.7x | 2.7x | 2.4x | 7.1x |
