DEQ Systems Corp EBITDA dropped on 124% in 2015 and EBITDA Margin dropped on 15.7 pp from 13.1% to -2.6%
29.03.2016 • About DEQ Systems Corp (
$DEQ) • By InTwits
DEQ Systems Corp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- DEQ Systems Corp doesn't have a profitable business model yet: FY2015 ROIC is -34.0%
- The company operates at negative EBITDA Margin: -2.6%
- DEQ Systems Corp spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 is 0.0%. Average EBITDA Margin for the same period was -0.4%0
- DEQ Systems Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.9%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: 0.22 in FY2015, 0.52 in FY2014, 0.48 in FY2013, 0.50 in FY2012, 0.89 in FY2011
- The company has unprofitable business model: ROIC is at -34.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
DEQ Systems Corp ($DEQ) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 4.647 | 5.605 | 7.004 | 7.540 | 9.082 | 20.5% |
| Gross Profit | 3.454 | 4.345 | 5.490 | 6.386 | 7.510 | 17.6% |
| SG&A | | | | | 8.475 | |
| EBITDA | -0.798 | -0.546 | 0.445 | 0.988 | -0.235 | -123.8% |
| Net Income | -3.491 | -3.336 | -2.368 | -1.901 | -2.656 | 39.7% |
Balance Sheet
|
|---|
| Cash | 1.843 | 0.751 | 1.565 | 1.654 | 2.550 | 54.1% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.893 | 0.504 | 0.484 | 0.519 | 0.216 | -58.4% |
Ratios
|
|---|
| Revenue growth | -4.3% | 20.6% | 25.0% | 7.7% | 20.5% | |
| EBITDA growth | 403.6% | -31.5% | -181.4% | 122.0% | -123.8% | |
| Gross Margin | 74.3% | 77.5% | 78.4% | 84.7% | 82.7% | -2.0% |
| EBITDA Margin | -17.2% | -9.8% | 6.4% | 13.1% | -2.6% | -15.7% |
| Net Income Margin | -75.1% | -59.5% | -33.8% | -25.2% | -29.2% | -4.0% |
| SG&A, % of revenue | | | | | 93.3% | 93.3% |
| CAPEX, % of revenue | 19.2% | 9.0% | 6.9% | 6.9% | 2.4% | -4.5% |
| ROIC | -23.4% | -27.6% | -24.3% | -21.0% | -34.0% | -13.0% |
| ROE | -23.1% | -28.1% | -24.5% | -23.0% | -40.9% | -17.8% |
| Net Debt/EBITDA | | | -3.5x | -1.7x | | 1.7x |
Revenue and profitability
The company's Revenue surged on 20.5% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.61 pp from 6.8% to 7.4% in FY2015.
Gross Margin decreased on 2.0 pp from 84.7% to 82.7% in FY2015.
Net Income marign decreased on 4.0 pp from -25.2% to -29.2% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 2.4%. The company showed decline in CAPEX/Revenue of 6.6 pp from 9.0% in FY2012 to 2.4% in FY2015. Average CAPEX/Revenue for the last three years was 5.4%.
Return on investment
The company operates at negative ROIC (-34.04%) and ROE (-40.87%). ROIC dropped on 13.0 pp from -21.0% to -34.0% in FY2015. ROE dropped on 17.8 pp from -23.0% to -40.9% in FY2015.
Leverage (Debt)
The company has no debt. Cash jumped on 54.1% in FY2015.
Appendix 1: Peers in Consumer, Cyclical
Below you can find DEQ Systems Corp 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Restaurant Brands International Inc ($QSR) | | | | 4.6% | 238.0% |
| DHX Media Ltd ($DHX.A) | | 31.1% | 33.9% | 19.4% | 127.4% |
| Amaya Inc ($AYA) | | 311.5% | 85.2% | 254.0% | 113.8% |
| Hudson's Bay Co ($HBC) | | 3.5% | 5.9% | 28.1% | 56.4% |
| Exchange Income Corp ($EIF) | | 56.9% | -36.4% | 6.6% | 48.8% |
| |
|---|
| Median (65 companies) | 6.4% | 5.2% | 4.7% | 6.8% | 4.9% |
|---|
| DEQ Systems Corp ($DEQ) | | 20.6% | 25.0% | 7.7% | 20.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Imvescor Restaurant Group Inc ($IRG) | 96.2% | 94.2% | 89.7% | 84.9% | 84.3% |
| Second Cup Ltd/The ($SCU) | 91.1% | 86.6% | 85.1% | 72.7% | 81.1% |
| New Look Vision Group Inc ($BCI) | 72.3% | 71.8% | 72.6% | 72.6% | 78.7% |
| Cara Operations Ltd ($CAO) | | | 79.2% | 78.9% | 78.4% |
| Canlan Ice Sports Corp ($ICE) | 70.7% | 71.6% | 69.7% | 70.7% | 78.2% |
| |
|---|
| Median (57 companies) | 37.0% | 35.3% | 32.1% | 34.6% | 32.6% |
|---|
| DEQ Systems Corp ($DEQ) | 74.3% | 77.5% | 78.4% | 84.7% | 82.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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 ($GC) | 34.1% | 16.8% | 41.1% | 40.1% | 36.6% |
| Imvescor Restaurant Group Inc ($IRG) | 26.5% | 27.9% | 27.3% | 25.5% | 35.9% |
| Whistler Blackcomb Holdings Inc ($WB) | 34.8% | 36.0% | 35.9% | 36.4% | 35.4% |
| |
|---|
| Median (60 companies) | 8.9% | 8.1% | 9.8% | 10.0% | 9.7% |
|---|
| DEQ Systems Corp ($DEQ) | -17.2% | -9.8% | 6.4% | 13.1% | -2.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Holloway Lodging Corp ($HLC) | 3.4% | 8.2% | 6.7% | 14.8% | 26.7% |
| WestJet Airlines Ltd ($WJA) | 3.9% | 7.9% | 19.5% | 18.6% | 22.5% |
| Westshore Terminals Investment Corp ($WTE) | | 25.7% | 11.5% | 6.2% | 21.2% |
| Exchange Income Corp ($EIF) | 8.2% | 7.9% | 15.8% | 15.5% | 15.4% |
| Chorus Aviation Inc ($CHR.A) | 12.5% | 9.9% | 9.6% | 3.9% | 15.0% |
| |
|---|
| Median (65 companies) | 2.8% | 2.7% | 2.7% | 2.4% | 2.8% |
|---|
| DEQ Systems Corp ($DEQ) | 19.2% | 9.0% | 6.9% | 6.9% | 2.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Partner Jet Corp ($PJT) | -30.7% | -51.6% | -50.8% | 85.1% | 51.1% |
| Westshore Terminals Investment Corp ($WTE) | | 24.0% | 37.8% | 35.0% | 38.3% |
| BRP Inc/CA ($DOO) | | 29.8% | 26.8% | 32.3% | 35.3% |
| Cara Operations Ltd ($CAO) | | | | 24.7% | 35.1% |
| Jean Coutu Group PJC Inc/The ($PJC.A) | 33.5% | 34.4% | 29.8% | 29.2% | 30.2% |
| |
|---|
| Median (65 companies) | 10.8% | 9.8% | 10.5% | 9.8% | 10.9% |
|---|
| DEQ Systems Corp ($DEQ) | -23.4% | -27.6% | -24.3% | -21.0% | -34.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Holloway Lodging Corp ($HLC) | | | 5.8x | 8.4x | 17.1x |
| Discovery Air Inc ($DA.A) | 3.2x | 2.8x | 3.8x | 7.5x | 11.4x |
| AutoCanada Inc ($ACQ) | 1.9x | 4.2x | 4.7x | 6.4x | 8.0x |
| Second Cup Ltd/The ($SCU) | 0.6x | 1.0x | 0.6x | 0.0x | 7.5x |
| Amaya Inc ($AYA) | | 17.9x | 1.8x | 13.5x | 6.6x |
| |
|---|
| Median (54 companies) | 1.3x | 1.4x | 1.9x | 2.1x | 1.9x |
|---|
