Empire Industries Ltd/Canada reports 7.3% revenue growth in 2015 and almost no change in EBITDA Margin of 5.2%
18.04.2016 • About Empire Industries Ltd/Canada (
$EIL) • By InTwits
Empire Industries Ltd/Canada reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Empire Industries Ltd/Canada is a fast growth stock: 2015 revenue growth was 7.3%, 5 year revenue CAGR was 24.8% at 2015 ROIC 18.8%
- EBITDA Margin is quite volatile: 5.2% in 2015, 5.5% in 2014, 4.5% in 2013, 2.2% in 2012, -7.6% in 2011
- Empire Industries Ltd/Canada has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.4%. At the same time it's a lot of higher than industry average of 27.3%.
- CAPEX is quite volatile: 4.8 in 2015, 2.1 in 2014, 1.6 in 2013, 0.52 in 2012, 0.33 in 2011
- The company has highly profitable business model: ROIC is at 18.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Empire Industries Ltd/Canada ($EIL) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 54.1 | 83.7 | 117.8 | 141.2 | 151.4 | 7.3% |
| Gross Profit | 4.6 | 11.2 | 19.7 | 24.7 | 25.2 | 1.9% |
| SG&A | | | 13.4 | 16.7 | 17.1 | 2.0% |
| EBITDA | -4.1 | 1.9 | 5.3 | 7.8 | 7.8 | 0.3% |
| Net Income | -7.3 | -0.6 | 4.4 | 6.1 | 1.4 | -77.4% |
Balance Sheet
|
|---|
| Cash | 0.6 | 0.0 | 0.3 | 0.0 | 0.1 | 161.3% |
| Short Term Debt | 17.7 | 4.5 | 8.3 | 10.7 | 8.3 | -22.2% |
| Long Term Debt | 2.5 | 2.9 | 4.6 | 4.0 | 2.5 | -36.4% |
Cash flow
|
|---|
| Capex | 0.3 | 0.5 | 1.6 | 2.1 | 4.8 | 129.3% |
Ratios
|
|---|
| Revenue growth | 8.1% | 54.8% | 40.8% | 19.8% | 7.3% | |
| EBITDA growth | -397.8% | -145.4% | 183.5% | 47.3% | 0.3% | |
| Gross Margin | 8.5% | 13.4% | 16.7% | 17.5% | 16.6% | -0.9% |
| EBITDA Margin | -7.6% | 2.2% | 4.5% | 5.5% | 5.2% | -0.4% |
| Net Income Margin | -13.5% | -0.7% | 3.8% | 4.3% | 0.9% | -3.4% |
| SG&A, % of revenue | | | 11.4% | 11.9% | 11.3% | -0.6% |
| CAPEX, % of revenue | 0.6% | 0.6% | 1.3% | 1.5% | 3.2% | 1.7% |
| ROIC | -20.2% | 3.7% | 20.2% | 21.3% | 18.8% | -2.5% |
| ROE | -84.6% | -8.6% | 39.5% | 32.5% | 6.0% | -26.5% |
| Net Debt/EBITDA | | 3.9x | 2.4x | 1.9x | 1.4x | -0.5x |
Revenue and profitability
The company's Revenue increased on 7.3% in 2015. EBITDA Margin showed almost no change in 2015.
Gross Margin decreased slightly on 0.88 pp from 17.5% to 16.6% in 2015. SG&A as a % of Revenue decreased slightly on 0.58 pp from 11.9% to 11.3% in 2015.
Net Income marign decreased on 3.4 pp from 4.3% to 0.90% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.2% in 2015. Empire Industries Ltd/Canada showed CAPEX/Revenue growth of 2.5 pp from 0.62% in 2012 to 3.2% in 2015. It's average level of CAPEX/Revenue for the last three years was 2.0%.Empire Industries Ltd/Canada maintained rich investment policy and has spent a big chunk of EBITDA (61.1%) to CAPEX.
Return on investment
The company operates at good ROIC (18.78%) while ROE is low (6.00%). ROIC decreased on 2.5 pp from 21.3% to 18.8% in 2015. ROE dropped on 26.5 pp from 32.5% to 6.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.4x and Debt / EBITDA is 1.4x. Net Debt / EBITDA dropped on 0.5x from 1.9x to 1.4x in 2015. Debt dropped on 26.0% in 2015 while cash surged on 161% in 2015.
Appendix 1: Peers in Industrial
Below you can find Empire Industries Ltd/Canada 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 |
|---|
| Diversified Royalty Corp ($DIV) | | | | | 503.3% |
| Electrovaya Inc ($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 ($LMP) | | 56.7% | 33.9% | 47.0% | 61.8% |
| |
|---|
| Median (83 companies) | -3.5% | 10.4% | 4.9% | 9.1% | 10.9% |
|---|
| Empire Industries Ltd/Canada ($EIL) | | 54.8% | 40.8% | 19.8% | 7.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pure Technologies Ltd ($PUR) | 75.7% | 77.9% | 78.0% | 77.5% | 75.6% |
| WSP Global Inc ($WSP) | 81.1% | 81.1% | 83.2% | 81.0% | 74.0% |
| FLYHT Aerospace Solutions Ltd ($FLY) | 54.0% | 57.2% | 59.2% | 62.9% | 69.3% |
| Alarmforce Industries Inc ($AF) | 76.4% | 75.0% | 76.5% | 72.2% | 69.2% |
| Epicore BioNetworks Inc ($EBN) | 59.0% | 60.8% | 63.2% | 64.1% | 58.1% |
| |
|---|
| Median (77 companies) | 23.4% | 23.4% | 23.4% | 23.1% | 24.0% |
|---|
| Empire Industries Ltd/Canada ($EIL) | 8.5% | 13.4% | 16.7% | 17.5% | 16.6% |
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 ($VCI) | 29.0% | 31.4% | 32.2% | 37.8% | 39.0% |
| Photon Control Inc ($PHO) | 8.1% | 17.6% | 24.8% | 29.3% | 38.3% |
| Evertz Technologies Ltd ($ET) | 37.2% | 29.6% | 29.1% | 23.0% | 27.0% |
| |
|---|
| Median (78 companies) | 8.3% | 9.4% | 8.3% | 7.7% | 9.5% |
|---|
| Empire Industries Ltd/Canada ($EIL) | -7.6% | 2.2% | 4.5% | 5.5% | 5.2% |
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 ($CNR) | 18.0% | 17.4% | 18.7% | 18.9% | 21.5% |
| |
|---|
| Median (82 companies) | 3.0% | 3.1% | 3.7% | 3.2% | 3.5% |
|---|
| Empire Industries Ltd/Canada ($EIL) | 0.6% | 0.6% | 1.3% | 1.5% | 3.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Biorem Inc ($BRM) | -141.4% | -15.1% | 32.3% | -29.7% | 54.4% |
| Vitreous Glass Inc ($VCI) | 26.1% | 30.5% | 32.3% | 48.3% | 51.0% |
| Photon Control Inc ($PHO) | 10.1% | 21.0% | 44.4% | 38.0% | 40.6% |
| Pacific Safety Products Inc ($PSP) | -19.0% | -1.5% | -11.5% | 3.7% | 38.2% |
| CEMATRIX Corp ($CVX) | 15.7% | 6.4% | -2.4% | -6.7% | 30.4% |
| |
|---|
| Median (83 companies) | 9.1% | 10.0% | 8.5% | 8.5% | 9.7% |
|---|
| Empire Industries Ltd/Canada ($EIL) | -20.2% | 3.7% | 20.2% | 21.3% | 18.8% |
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 ($FTT) | 1.8x | 2.3x | 1.8x | 1.4x | 9.4x |
| |
|---|
| Median (69 companies) | 1.1x | 1.5x | 1.4x | 1.2x | 1.0x |
|---|
| Empire Industries Ltd/Canada ($EIL) | | 3.9x | 2.4x | 1.9x | 1.4x |
