Vecima Networks Inc EBITDA surged on 49.4% in 2016 and Revenue surged on 19.2%
26.09.2016 • About Vecima Networks Inc (
$VCM) • By InTwits
Vecima Networks Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 30.3% in FY2016 vs. 24.2% in FY2015 vs. 21.5% in FY2012
- Vecima Networks Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.2%. At the same time it's a lot of higher than industry average of 1.7%.
- CAPEX is quite volatile: 5.2 in FY2016, 2.1 in FY2015, 3.0 in FY2014, 2.3 in FY2013, 3.2 in FY2012
- The company has highly profitable business model: ROIC is at 19.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Vecima Networks Inc ($VCM) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 95.7 | 91.9 | 90.7 | 90.9 | 108.4 | 19.2% |
| Gross Profit | 35.2 | 39.2 | 44.9 | 49.8 | 61.8 | 24.0% |
| SG&A | | 22.7 | 21.7 | 19.4 | 20.2 | 3.7% |
| EBITDA | 20.5 | 13.7 | 18.1 | 22.0 | 32.9 | 49.4% |
| Net Income | 13.3 | 19.2 | 24.6 | 15.1 | 22.0 | 45.1% |
Balance Sheet
|
|---|
| Cash | 19.5 | 7.1 | 15.3 | 12.8 | 22.2 | 73.9% |
| Short Term Debt | 0.3 | 0.3 | 0.4 | 0.3 | 0.3 | -6.6% |
| Long Term Debt | 3.5 | 3.2 | 3.0 | 2.7 | 2.5 | -9.2% |
Cash flow
|
|---|
| Capex | 3.2 | 2.3 | 3.0 | 2.1 | 5.2 | 150.6% |
Ratios
|
|---|
| Revenue growth | 13.3% | -4.0% | -1.3% | 0.3% | 19.2% | |
| EBITDA growth | 290.9% | -33.1% | 32.0% | 21.3% | 49.4% | |
| Gross Margin | 36.8% | 42.7% | 49.5% | 54.8% | 57.0% | 2.2% |
| EBITDA Margin | 21.5% | 15.0% | 20.0% | 24.2% | 30.3% | 6.1% |
| Net Income Margin | 13.9% | 20.9% | 27.1% | 16.6% | 20.3% | 3.6% |
| SG&A, % of revenue | | 24.7% | 23.9% | 21.4% | 18.6% | -2.8% |
| CAPEX, % of revenue | 3.3% | 2.5% | 3.3% | 2.3% | 4.8% | 2.5% |
| ROIC | 11.7% | 6.4% | 11.4% | 14.5% | 19.3% | 4.8% |
| ROE | 9.9% | 13.8% | 17.8% | 10.4% | 13.7% | 3.3% |
| Net Debt/EBITDA | -0.8x | -0.3x | -0.7x | -0.4x | -0.6x | -0.1x |
Vecima Networks Inc ($VCM) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 26 | 25 | 32 | 22 | 11.6% | 3.6% | 37.2% | 7.0% |
| EBITDA | 8 | 9 | 10 | 6 | 58.6% | 65.4% | 98.1% | -6.4% |
| Net Income | 6 | 7 | 6 | 3 | 50.7% | 76.5% | 68.6% | -11.9% |
Balance Sheet
|
|---|
| Cash | 15 | 11 | 18 | 22 | 105.5% | 25.6% | 41.7% | 73.9% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0.0% | 0.0% | 0.0% | -6.6% |
| Long Term Debt | 3 | 3 | 3 | 2 | -8.6% | -8.8% | -9.0% | -9.2% |
Ratios
|
|---|
| Gross Margin | 56.8% | 54.1% | 57.8% | 58.9% | 6.9% | 2.3% | 1.1% | -2.6% |
| EBITDA Margin | 31.4% | 35.2% | 30.9% | 28.0% | 9.3% | 13.1% | 9.5% | -4.0% |
| Net Income Margin | 23.4% | 26.5% | 18.8% | 15.3% | 6.1% | 11.0% | 3.5% | -3.3% |
Revenue and profitability
Vecima Networks Inc's Revenue surged on 19.2%. Revenue growth showed slow down in FY16Q4 - it was 7.0% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.9 pp from 22.1% to 15.3% in FY2016.
Gross Margin increased on 2.2 pp from 54.8% to 57.0% in FY2016. SG&A as a % of Revenue decreased on 2.8 pp from 21.4% to 18.6% in FY2016.
Net Income marign increased on 3.6 pp from 16.6% to 20.3% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.8% in FY2016. The company showed CAPEX/Revenue growth of 2.3 pp from 2.5% in FY2013 to 4.8% in FY2016. For the last three years the average CAPEX/Revenue was 3.4%.
Return on investment
The company operates at good ROIC (19.33%) and ROE (13.71%). ROIC increased on 4.8 pp from 14.5% to 19.3% in FY2016. ROE increased on 3.3 pp from 10.4% to 13.7% in FY2016.
Leverage (Debt)
Debt level is -0.6x Net Debt / EBITDA and 0.1x Debt / EBITDA. Net Debt / EBITDA dropped on 0.1x from -0.4x to -0.6x in FY2016. Debt decreased on 9.0% while cash jumped on 73.9%.
Appendix 1: Peers in Communications
Below we provide Vecima Networks 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| AcuityAds Holding Inc ($AT) | | | | 51.6% | 91.4% |
| Shopify Inc ($SH) | | 111.9% | 109.0% | 95.4% | 89.7% |
| Gaming Nation Inc ($FAN) | | | | | 46.6% |
| Tucows Inc ($TC) | | 13.3% | 13.6% | 17.1% | 9.8% |
| Points International Ltd ($PTS) | | 45.1% | 26.0% | 16.2% | 8.6% |
| |
|---|
| Median (26 companies) | 13.1% | 3.5% | 2.1% | 4.2% | 2.3% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wanted Technologies Corp ($WAN) | 90.5% | 93.2% | 94.3% | 95.6% | |
| NeuLion Inc ($NLN) | 53.6% | 63.8% | 70.2% | 81.1% | 81.6% |
| TeraGo Inc ($TGO) | 62.9% | 61.8% | 59.8% | 77.2% | 77.2% |
| ICTV Brands Inc ($ITV) | 67.4% | 71.9% | 69.6% | 68.1% | |
| Platinum Communications Corp ($PCS) | 67.4% | 67.1% | 60.2% | 60.5% | |
| |
|---|
| Median (23 companies) | 44.2% | 42.8% | 45.3% | 46.4% | 41.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BCE Inc ($BCE) | 38.8% | 37.7% | 38.4% | 37.7% | 39.8% |
| Rogers Communications Inc ($RCI.A) | 37.3% | 38.4% | 37.9% | 36.9% | 32.5% |
| Quebecor Inc ($QBR.B) | 27.5% | 36.3% | 35.5% | 34.2% | 35.5% |
| TELUS Corp ($T) | 35.3% | 35.2% | 35.1% | 34.1% | 33.0% |
| ZoomerMedia Ltd ($ZUM) | 32.6% | 33.8% | 29.3% | 29.1% | 27.1% |
| |
|---|
| Median (30 companies) | 17.0% | 10.7% | 9.9% | 9.9% | 7.7% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| TELUS Corp ($T) | 17.9% | 17.8% | 19.8% | 20.2% | 21.5% |
| Rogers Communications Inc ($RCI.A) | 17.2% | 17.6% | 18.4% | 18.2% | 17.2% |
| Quebecor Inc ($QBR.B) | 16.7% | 15.4% | 17.9% | 17.5% | 17.6% |
| BCE Inc ($BCE) | 17.6% | 17.5% | 17.7% | 16.9% | 17.4% |
| TeraGo Inc ($TGO) | 20.9% | 21.5% | 23.1% | 14.8% | 13.0% |
| |
|---|
| Median (29 companies) | 2.7% | 3.0% | 2.3% | 2.3% | 3.0% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tucows Inc ($TC) | 17.7% | 22.5% | 35.4% | 51.4% | 58.4% |
| BCE Inc ($BCE) | 14.1% | 12.6% | 12.6% | 12.3% | 12.6% |
| Quebecor Inc ($QBR.B) | 7.9% | 9.6% | 8.4% | 8.4% | 10.1% |
| MDC Partners Inc ($MDZ.A) | -3.1% | -6.3% | 14.2% | 13.7% | 10.1% |
| TELUS Corp ($T) | 12.4% | 13.0% | 13.0% | 11.5% | 9.6% |
| |
|---|
| Median (29 companies) | 8.9% | 7.9% | 7.3% | 2.6% | 0.1% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Intertain Group Ltd/The ($IT) | | | | 9.4x | |
| MDC Partners Inc ($MDZ.A) | 12.4x | 112.6x | 4.6x | 5.5x | 9.6x |
| Quebecor Inc ($QBR.B) | 3.7x | 3.9x | 4.2x | 4.8x | 4.3x |
| Rogers Communications Inc ($RCI.A) | 2.3x | 2.4x | 3.2x | 3.6x | 3.8x |
| Newfoundland Capital Corp Ltd ($NCC.B) | 1.4x | 1.3x | 3.3x | 3.2x | |
| |
|---|
| Median (21 companies) | 1.4x | 1.3x | 1.5x | 1.6x | 1.7x |
|---|
