Inscape Corp revenue surged on 15.0% in 2016
23.06.2016 • About Inscape Corp (
$INQ) • By InTwits
Inscape Corp reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Inscape Corp doesn't have a profitable business model yet: FY2016 ROIC is -21.8%
- EBITDA Margin is relatively stable: -4.3% in FY2016 vs. in FY2015 vs. 0.2% in FY2012
- Inscape Corp spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 is 0.0%. Average EBITDA Margin for the same period was -0.9%0
- Inscape Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.0%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: 2.1 in FY2016, 1.8 in FY2015, 1.3 in FY2014, 1.3 in FY2013, 4.7 in FY2012
- The company has unprofitable business model: ROIC is at -21.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Inscape Corp ($INQ) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 78.944 | 74.900 | 66.155 | 69.424 | 79.846 | 15.0% |
| Gross Profit | 17.997 | 19.852 | 14.742 | 14.808 | 19.803 | 33.7% |
| SG&A | | 21.413 | 20.890 | 22.344 | 26.162 | 17.1% |
| EBITDA | 0.150 | | | | -3.447 | |
| Net Income | -1.989 | -1.256 | -7.092 | -13.076 | -1.254 | |
Balance Sheet
|
|---|
| Cash | 8.921 | 8.193 | 6.029 | 3.192 | 5.989 | 87.6% |
| 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 | 4.682 | 1.342 | 1.294 | 1.760 | 2.069 | 17.6% |
Ratios
|
|---|
| Revenue growth | -9.7% | -5.1% | -11.7% | 4.9% | 15.0% | |
| EBITDA growth | -98.1% | | | | | |
| Gross Margin | 22.8% | 26.5% | 22.3% | 21.3% | 24.8% | 3.5% |
| EBITDA Margin | 0.2% | 0.0% | 0.0% | 0.0% | -4.3% | -4.3% |
| Net Income Margin | -2.5% | -1.7% | -10.7% | -18.8% | -1.6% | 17.3% |
| SG&A, % of revenue | | 28.6% | 31.6% | 32.2% | 32.8% | 0.6% |
| CAPEX, % of revenue | 5.9% | 1.8% | 2.0% | 2.5% | 2.6% | 0.1% |
| ROIC | -7.0% | -3.1% | -13.0% | -19.9% | -21.8% | -1.9% |
| ROE | -3.8% | -2.5% | -15.5% | -35.6% | -4.5% | 31.2% |
| Net Debt/EBITDA | -59.5x | | | | | 0.0x |
Inscape Corp ($INQ) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 15 | 21 | 23 | 20 | -19.8% | 1.2% | 36.1% | 62.0% |
| Net Income | -5 | 1 | -2 | 5 | -747.4% | | | |
Balance Sheet
|
|---|
| Cash | 4 | 2 | 4 | 6 | -4.4% | -60.0% | -31.0% | 87.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 20.9% | 24.0% | 27.6% | 25.4% | -5.8% | -0.2% | 7.0% | 16.0% |
| Net Income Margin | -33.0% | 2.7% | -9.4% | 26.2% | -37.1% | 7.8% | 46.3% | 53.1% |
Revenue and profitability
Inscape Corp's Revenue surged on 15.0%. Revenue growth showed acceleration in FY16Q4 - it increased 62.0% YoY.
Gross Margin increased on 3.5 pp from 21.3% to 24.8% in FY2016. SG&A as a % of Revenue increased slightly on 0.58 pp from 32.2% to 32.8% in FY2016.
Net Income marign surged on 17.3 pp from -18.8% to -1.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Inscape Corp had CAPEX/Revenue of 2.6%. Inscape Corp showed small growth in CAPEX/Revenue of 0.80 pp from 1.8% in FY2013 to 2.6% in FY2016. It's average level of CAPEX/Revenue for the last three years was 2.4%.
Return on investment
The company operates at negative ROIC (-21.77%) and ROE (-4.45%). ROIC decreased slightly on 1.9 pp from -19.9% to -21.8% in FY2016. ROE surged on 31.2 pp from -35.6% to -4.5% in FY2016.
Leverage (Debt)
The company has no debt. Cash jumped on 87.6%.
Appendix 1: Peers in Consumer, Cyclical
Below we provide Inscape Corp benchmarking against other companies in Consumer, Cyclical industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| New Flyer Industries Inc ($NFI) | | 38.6% | 21.0% | 6.1% | 47.8% |
| Hardwoods Distribution Inc ($HWD) | | 21.3% | 22.8% | 25.4% | 38.1% |
| Spin Master Corp ($TOY) | | 21.5% | 41.0% | 22.9% | 31.3% |
| Great Canadian Gaming Corp ($GC) | | -0.3% | 9.6% | 3.7% | 22.4% |
| CanWel Building Materials Group Ltd ($CWX) | | 2.1% | 4.6% | 8.6% | 18.6% |
| |
|---|
| Median (36 companies) | | 4.9% | 6.9% | 6.8% | 5.0% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Innova Gaming Group Inc ($IGG) | 89.3% | 82.4% | 85.3% | 92.9% | 88.1% |
| Second Cup Ltd/The ($SCU) | 86.6% | 85.1% | 72.7% | 81.1% | |
| New Look Vision Group Inc ($BCI) | 71.8% | 72.6% | 72.6% | 78.7% | |
| Cara Operations Ltd ($CAO) | | 79.2% | 78.9% | 78.4% | |
| Canlan Ice Sports Corp ($ICE) | 71.6% | 69.7% | 70.7% | 78.2% | |
| |
|---|
| Median (37 companies) | 36.1% | 31.6% | 32.5% | 31.5% | 34.6% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Westshore Terminals Investment Corp ($WTE) | 49.7% | 65.9% | 60.9% | 59.6% | |
| Gamehost Inc ($GH) | 46.1% | 45.7% | 45.9% | 42.8% | 42.6% |
| Great Canadian Gaming Corp ($GC) | 16.8% | 41.1% | 40.1% | 36.6% | 34.4% |
| Restaurant Brands International Inc ($QSR) | | 51.1% | 20.8% | 33.9% | 44.4% |
| Cara Operations Ltd ($CAO) | | 9.6% | 22.6% | 32.6% | |
| |
|---|
| Median (39 companies) | 8.1% | 9.8% | 12.3% | 10.1% | 15.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($HLC) | 8.2% | 6.7% | 14.8% | 26.7% | 9.3% |
| WestJet Airlines Ltd ($WJA) | 7.9% | 19.5% | 18.6% | 22.5% | 22.4% |
| Westshore Terminals Investment Corp ($WTE) | 25.7% | 11.5% | 6.2% | 21.2% | |
| Innova Gaming Group Inc ($IGG) | 20.6% | 26.7% | 15.9% | 15.6% | 15.1% |
| Exchange Income Corp ($EIF) | 7.9% | 15.8% | 15.5% | 15.4% | 29.7% |
| |
|---|
| Median (42 companies) | 2.7% | 3.1% | 3.4% | 3.4% | 4.9% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Spin Master Corp ($TOY) | | 19.2% | 56.9% | 48.2% | 44.5% |
| Magna International Inc ($MG) | 16.3% | 18.6% | 25.2% | 21.9% | 21.2% |
| Linamar Corp ($LNR) | 12.9% | 17.0% | 21.7% | 23.7% | 19.8% |
| Sleep Country Canada Holdings Inc ($ZZZ) | | | 9.7% | 12.7% | 19.0% |
| Air Canada ($AC) | | 37.0% | 23.2% | 28.4% | 18.8% |
| |
|---|
| Median (42 companies) | 10.5% | 12.5% | 10.8% | 10.6% | 11.2% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($HLC) | | 5.8x | 8.4x | 17.1x | 8.6x |
| AutoCanada Inc ($ACQ) | 4.2x | 4.7x | 6.4x | 8.0x | 13.7x |
| Second Cup Ltd/The ($SCU) | 1.0x | 0.6x | 0.0x | 7.5x | 0.0x |
| Amaya Inc ($AYA) | 17.9x | 1.8x | 13.5x | 6.6x | 5.0x |
| Performance Sports Group Ltd ($PSG) | 2.6x | 3.5x | 12.2x | 6.5x | |
| |
|---|
| Median (35 companies) | 1.9x | 2.8x | 2.4x | 2.5x | 2.1x |
|---|
