Sigma Industries Inc reports 30.0% EBITDA growth and almost no change in Revenue of 64.9
14.07.2016 • About Sigma Industries Inc (
$SSG) • By InTwits
Sigma Industries Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 7.7% in FY2016, 5.9% in FY2015, 0.1% in FY2014, 2.6% in FY2013, 5.9% in FY2012
- Sigma Industries Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- The company has highly profitable business model: ROIC is at 23.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.5x while industry average is 2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sigma Industries Inc ($SSG) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 73.696 | 55.461 | 54.680 | 65.068 | 64.923 | -0.2% |
| Gross Profit | 4.355 | 1.486 | 0.141 | 3.759 | 4.787 | 27.4% |
| EBITDA | 4.355 | 1.426 | 0.062 | 3.857 | 5.014 | 30.0% |
| Net Income | 3.141 | -1.359 | -3.575 | 1.862 | 1.867 | 0.3% |
Balance Sheet
|
|---|
| Cash | 0.397 | 0.743 | 0.749 | 0.246 | 0.339 | 38.1% |
| Short Term Debt | 18.972 | 14.167 | 12.745 | 9.527 | 9.022 | -5.3% |
| Long Term Debt | 0.427 | 2.746 | 2.000 | 2.000 | 3.865 | 93.3% |
Cash flow
|
|---|
| Capex | 0.289 | 0.000 | 0.667 | 1.007 | 0.998 | -0.9% |
Ratios
|
|---|
| Revenue growth | 38.1% | -24.7% | -1.4% | 19.0% | -0.2% | |
| EBITDA growth | -1,029.5% | -67.3% | -95.7% | 6,127.2% | 30.0% | |
| Gross Margin | 5.9% | 2.7% | 0.3% | 5.8% | 7.4% | 1.6% |
| EBITDA Margin | 5.9% | 2.6% | 0.1% | 5.9% | 7.7% | 1.8% |
| Net Income Margin | 4.3% | -2.5% | -6.5% | 2.9% | 2.9% | 0.0% |
| CAPEX, % of revenue | 0.4% | 0.0% | 1.2% | 1.5% | 1.5% | -0.0% |
| ROIC | 10.1% | 0.8% | -6.5% | 18.6% | 23.8% | 5.2% |
| ROE | 108.7% | -37.8% | | | 68.6% | 68.6% |
| Net Debt/EBITDA | 4.4x | 11.3x | 225.9x | 2.9x | 2.5x | -0.4x |
Sigma Industries Inc ($SSG) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 16 | 18 | 15 | 15 | 9.9% | 17.4% | -6.4% | -17.5% |
| EBITDA | 1 | 2 | 1 | 1 | 18.1% | 45.2% | 70.3% | 8.4% |
| Net Income | 0 | 1 | 0 | 1 | 398.8% | -32.7% | 69.2% | 6.4% |
Balance Sheet
|
|---|
| Cash | 1 | 1 | 1 | 0 | 21.5% | 39.3% | 48.4% | 38.1% |
| Short Term Debt | 9 | 9 | 9 | 9 | -28.5% | 26.8% | 24.6% | -5.3% |
| Long Term Debt | 2 | 2 | 2 | 4 | -56.5% | -70.3% | -68.8% | 93.3% |
Ratios
|
|---|
| Gross Margin | 6.5% | 7.0% | 6.8% | 9.3% | 0.4% | 0.0% | 3.1% | 2.9% |
| EBITDA Margin | 6.5% | 8.4% | 6.6% | 9.3% | 0.5% | 1.6% | 3.0% | 2.2% |
| Net Income Margin | 1.7% | 4.0% | 1.4% | 4.2% | 1.4% | -3.0% | 0.6% | 0.9% |
Revenue and profitability
The company's Revenue showed almost no change in FY2016. Revenue decline showed acceleration in FY16Q4 - it was 17.5% YoY. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.8 pp from 5.9% to 7.7% in FY2016.
Gross Margin increased slightly on 1.6 pp from 5.8% to 7.4% in FY2016.
Net Income marign showed almost no change in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.5% in FY2016. CAPEX/Revenue increased slightly1.5 pp from 0% in FY2013 to 1.5% in FY2016. For the last three years the average CAPEX/Revenue was 1.4%.
Return on investment
The company operates at high and attractive ROIC (23.77%) and ROE (68.58%). ROIC increased on 5.2 pp from 18.6% to 23.8% in FY2016.
Leverage (Debt)
Debt level is 2.5x Net Debt / EBITDA and 2.6x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from 2.9x to 2.5x in FY2016. Debt jumped on 11.8% while cash surged on 38.1%.
Appendix 1: Peers in Industrial
Below you can find Sigma Industries 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Progressive Waste Solutions Ltd ($BIN) | | 16.1% | 7.8% | 1.8% | 59.4% |
| Baylin Technologies Inc ($BYL) | | 16.5% | -44.0% | -4.1% | 47.5% |
| CCL Industries Inc ($CCL.B) | | 44.4% | 36.8% | 17.5% | 30.8% |
| Stantec Inc ($STN) | | 17.9% | 13.3% | 14.4% | 30.5% |
| Avigilon Corp ($AVO) | | 72.6% | 41.9% | 17.7% | 22.2% |
| |
|---|
| Median (52 companies) | | 5.1% | 10.1% | 8.1% | 2.9% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pure Technologies Ltd ($PUR) | 77.9% | 78.0% | 77.5% | 75.6% | |
| WSP Global Inc ($WSP) | 81.1% | 83.2% | 81.0% | 74.0% | 76.7% |
| Avigilon Corp ($AVO) | 49.3% | 54.2% | 56.6% | 57.4% | 52.0% |
| Stantec Inc ($STN) | 55.0% | 54.7% | 54.9% | 54.5% | 54.1% |
| IWG Technologies Inc ($IWG) | 53.3% | 54.0% | 49.0% | 47.8% | 54.9% |
| |
|---|
| Median (50 companies) | 23.6% | 23.4% | 21.7% | 21.7% | 22.2% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canadian National Railway Co ($CNR) | 46.5% | 45.9% | 46.8% | 50.9% | 54.3% |
| Canadian Pacific Railway Ltd ($CP) | 26.1% | 32.4% | 43.7% | 48.9% | 51.6% |
| Badger Daylighting Ltd ($BAD) | 25.7% | 25.9% | 27.9% | 24.6% | 24.2% |
| IWG Technologies Inc ($IWG) | 12.7% | 25.5% | 20.0% | 24.0% | 26.9% |
| Winpak Ltd ($WPK) | 19.5% | 18.6% | 18.7% | 22.7% | 23.5% |
| |
|---|
| Median (54 companies) | 10.4% | 8.4% | 8.4% | 8.6% | 11.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newalta Corp ($NAL) | 21.7% | 34.5% | 35.1% | 42.0% | 9.6% |
| Cargojet Inc ($CJT.A) | 7.0% | 6.3% | 54.1% | 41.3% | |
| Algoma Central Corp ($ALC) | 15.9% | 7.3% | 5.0% | 27.4% | 58.2% |
| Canadian Pacific Railway Ltd ($CP) | 20.2% | 20.2% | 21.9% | 22.7% | 19.0% |
| Canadian National Railway Co ($CNR) | 17.4% | 18.7% | 18.9% | 21.5% | 22.4% |
| |
|---|
| Median (55 companies) | 3.2% | 3.7% | 4.3% | 3.9% | 4.3% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| IBI Group Inc ($IBG) | 4.8% | -9.0% | 11.6% | 21.9% | 26.2% |
| IWG Technologies Inc ($IWG) | 17.0% | 36.3% | 23.4% | 27.2% | 25.7% |
| Winpak Ltd ($WPK) | 20.4% | 18.0% | 18.3% | 22.6% | 21.8% |
| Toromont Industries Ltd ($TIH) | 28.8% | 25.8% | 24.3% | 23.5% | 21.7% |
| Intertape Polymer Group Inc ($ITP) | 12.3% | 13.7% | 22.5% | 23.0% | 21.0% |
| |
|---|
| Median (56 companies) | 12.2% | 9.6% | 11.5% | 8.3% | 9.0% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Conifex Timber Inc ($CFF) | | 2.7x | 6.1x | 35.9x | 3.6x |
| Ag Growth International Inc ($AFN) | 2.9x | -0.1x | 2.1x | 14.1x | |
| Cargojet Inc ($CJT.A) | 1.5x | 1.5x | 31.5x | 12.9x | |
| Progressive Waste Solutions Ltd ($BIN) | 4.5x | 3.3x | 2.9x | 10.6x | 3.8x |
| Finning International Inc ($FTT) | 2.3x | 1.8x | 1.4x | 9.4x | 2.5x |
| |
|---|
| Median (50 companies) | 1.5x | 1.6x | 1.3x | 1.0x | 1.9x |
|---|
