Advent Wireless Inc reports 22.7% Net Income decline and 0.96 pp EBITDA Margin growth from 8.4% to 9.3%
18.04.2016 • About Advent Wireless Inc (
$AWI) • By InTwits
Advent Wireless Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Advent Wireless Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's a lot of higher than industry average of 35.3%.
- CAPEX is quite volatile: 0.070 in 2015, 0.80 in 2014, 1.2 in 2013, 0.023 in 2012, 0.040 in 2011
- The company has business model with low profitability: ROIC is at 8.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Advent Wireless Inc ($AWI) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 26.482 | 24.988 | 18.938 | 15.985 | 17.056 | 6.7% |
| Gross Profit | 8.401 | 8.538 | 6.932 | 6.309 | 6.348 | 0.6% |
| SG&A | | | 4.987 | 4.970 | 4.756 | -4.3% |
| EBITDA | 2.023 | 2.446 | 1.945 | 1.339 | 1.592 | 18.9% |
| Net Income | 1.382 | 1.765 | 1.417 | 1.575 | 1.217 | -22.7% |
Balance Sheet
|
|---|
| Cash | 11.595 | 14.175 | 13.402 | 12.787 | 12.320 | -3.7% |
| 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 | 0.040 | 0.023 | 1.231 | 0.799 | 0.070 | -91.3% |
Ratios
|
|---|
| Revenue growth | 10.6% | -5.6% | -24.2% | -15.6% | 6.7% | |
| EBITDA growth | -14.9% | 20.9% | -20.5% | -31.2% | 18.9% | |
| Gross Margin | 31.7% | 34.2% | 36.6% | 39.5% | 37.2% | -2.2% |
| EBITDA Margin | 7.6% | 9.8% | 10.3% | 8.4% | 9.3% | 1.0% |
| Net Income Margin | 5.2% | 7.1% | 7.5% | 9.9% | 7.1% | -2.7% |
| SG&A, % of revenue | | | 26.3% | 31.1% | 27.9% | -3.2% |
| CAPEX, % of revenue | 0.2% | 0.1% | 6.5% | 5.0% | 0.4% | -4.6% |
| ROIC | 16.2% | 17.3% | 12.4% | 7.7% | 8.8% | 1.1% |
| ROE | 12.1% | 13.6% | 9.7% | 10.2% | 7.6% | -2.6% |
| Net Debt/EBITDA | -5.7x | -5.8x | -6.9x | -9.6x | -7.7x | 1.8x |
Revenue and profitability
Advent Wireless Inc's Revenue increased on 6.7% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.96 pp from 8.4% to 9.3% in 2015.
Gross Margin decreased on 2.2 pp from 39.5% to 37.2% in 2015. SG&A as a % of Revenue decreased on 3.2 pp from 31.1% to 27.9% in 2015.
Net Income marign decreased on 2.7 pp from 9.9% to 7.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
Advent Wireless Inc's CAPEX/Revenue was 0.41% in 2015. CAPEX/Revenue showed almost no change from 2012 to 2015. For the last three years the average CAPEX/Revenue was 4.0%.
Return on investment
The company operates at low ROIC (8.78%) and ROE (7.64%). ROIC increased slightly on 1.1 pp from 7.7% to 8.8% in 2015. ROE decreased on 2.6 pp from 10.2% to 7.6% in 2015.
Leverage (Debt)
The company has no debt. Cash decreased on 3.7% in 2015.
Appendix 1: Peers in Communications
Below we provide Advent Wireless Inc benchmarking against other companies in Communications 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 |
|---|
| Intertain Group Ltd/The ($IT) | | | | | 842.9% |
| UrtheCast Corp ($UR) | | | | | 205.7% |
| DragonWave Inc ($DWI) | | -61.3% | 171.3% | -27.3% | 75.3% |
| Blackline Safety Corp ($BLN) | | 37.1% | 9.4% | 45.1% | 73.8% |
| NeuLion Inc ($NLN) | | -1.7% | 20.8% | 17.9% | 69.4% |
| |
|---|
| Median (48 companies) | -11.7% | 5.1% | 2.3% | 2.5% | 2.7% |
|---|
| Advent Wireless Inc ($AWI) | | -5.6% | -24.2% | -15.6% | 6.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanted Technologies Corp ($WAN) | 86.6% | 90.5% | 93.2% | 94.3% | 95.6% |
| CounterPath Corp ($CCV) | 74.1% | 80.0% | 85.1% | 80.9% | 81.5% |
| NeuLion Inc ($NLN) | 45.2% | 53.6% | 63.8% | 70.2% | 81.1% |
| Mediagrif Interactive Technologies Inc ($MDF) | 78.2% | 79.8% | 79.8% | 78.8% | 80.1% |
| TeraGo Inc ($TGO) | 65.0% | 62.9% | 61.8% | 59.8% | 77.2% |
| |
|---|
| Median (37 companies) | 43.3% | 43.3% | 42.7% | 43.1% | 46.9% |
|---|
| Advent Wireless Inc ($AWI) | 31.7% | 34.2% | 36.6% | 39.5% | 37.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cogeco Cable Inc ($CCA) | 45.8% | 46.0% | 44.9% | 43.8% | 46.2% |
| Shaw Communications Inc ($SJR.B) | 43.3% | 42.7% | 43.3% | 42.1% | 44.6% |
| Cogeco Inc ($CGO) | 28.1% | 43.2% | 43.5% | 43.3% | 44.3% |
| Manitoba Telecom Services Inc ($MBT) | 33.7% | 34.3% | 33.7% | 47.4% | 42.3% |
| Mediagrif Interactive Technologies Inc ($MDF) | 32.0% | 32.5% | 41.3% | 37.2% | 39.0% |
| |
|---|
| Median (47 companies) | 14.4% | 14.6% | 14.6% | 12.6% | 11.4% |
|---|
| Advent Wireless Inc ($AWI) | 7.6% | 9.8% | 10.3% | 8.4% | 9.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Axia NetMedia Corp ($AXX) | 10.7% | 30.8% | 27.2% | 27.0% | 36.2% |
| Manitoba Telecom Services Inc ($MBT) | 16.3% | 19.8% | 18.1% | 22.4% | 22.9% |
| Shaw Communications Inc ($SJR.B) | 17.4% | 18.2% | 18.2% | 19.7% | 22.2% |
| Cogeco Cable Inc ($CCA) | 24.6% | 28.1% | 23.0% | 20.6% | 20.7% |
| TELUS Corp ($T) | 18.0% | 17.9% | 17.8% | 19.8% | 20.2% |
| |
|---|
| Median (47 companies) | 4.3% | 2.3% | 2.8% | 2.0% | 2.3% |
|---|
| Advent Wireless Inc ($AWI) | 0.2% | 0.1% | 6.5% | 5.0% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tucows Inc ($TC) | 12.8% | 17.7% | 22.5% | 35.4% | 51.4% |
| Points International Ltd ($PTS) | 20.7% | 14.9% | 15.0% | 21.2% | 18.8% |
| RDM Corp ($RC) | -2.3% | 3.5% | 7.8% | 11.0% | 14.7% |
| Vecima Networks Inc ($VCM) | -0.6% | 11.7% | 6.4% | 11.4% | 14.5% |
| Norsat International Inc ($NII) | 3.1% | 10.9% | 1.4% | 13.7% | 13.8% |
| |
|---|
| Median (49 companies) | 6.3% | 8.0% | 8.3% | 8.3% | 3.6% |
|---|
| Advent Wireless Inc ($AWI) | 16.2% | 17.3% | 12.4% | 7.7% | 8.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Intertain Group Ltd/The ($IT) | | | | | 9.4x |
| MDC Partners Inc ($MDZ.A) | 7.3x | 12.4x | 112.6x | 4.6x | 5.5x |
| Quebecor Inc ($QBR.B) | 2.0x | 3.7x | 3.9x | 4.2x | 4.8x |
| Plaintree Systems Inc ($NPT) | 0.7x | | | 124.2x | 3.9x |
| Rogers Communications Inc ($RCI.A) | 2.2x | 2.3x | 2.4x | 3.2x | 3.6x |
| |
|---|
| Median (34 companies) | 1.0x | 1.4x | 1.3x | 1.5x | 1.5x |
|---|
| Advent Wireless Inc ($AWI) | -5.7x | -5.8x | -6.9x | -9.6x | -7.7x |
