RDM Corp Net Income dropped on 27.3% in 2016 and Revenue decreased on 9.4%
17.11.2016 • About RDM Corp (
$RC) • By InTwits
RDM Corp reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 26.4% in FY2016 vs. 23.8% in FY2015 vs. 10.0% in FY2012
- EBITDA Margin is quite volatile: 26.4% in FY2016, 23.8% in FY2015, 18.0% in FY2014, 15.7% in FY2013, 10.0% in FY2012
- RDM Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.1%. At the same time it's in pair with industry average of 1.7%.
- CAPEX is quite volatile: 0.58 in FY2016, 0.38 in FY2015, 1.3 in FY2014, 0.93 in FY2013, 0.31 in FY2012
- The company has highly profitable business model: ROIC is at 12.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
RDM Corp ($RC) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 20.440 | 21.870 | 22.689 | 23.530 | 21.321 | -9.4% |
| Gross Profit | 10.400 | 11.632 | 12.615 | 14.246 | 14.374 | 0.9% |
| SG&A | | 5.350 | 5.229 | 5.035 | 5.374 | 6.7% |
| EBITDA | 2.034 | 3.423 | 4.073 | 5.599 | 5.620 | 0.4% |
| Net Income | 1.791 | -0.519 | 2.845 | 5.326 | 3.870 | -27.3% |
Balance Sheet
|
|---|
| Cash | 18.897 | 20.126 | 22.422 | 26.405 | 31.047 | 17.6% |
| 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 | 0.305 | 0.930 | 1.290 | 0.376 | 0.580 | 54.3% |
Ratios
|
|---|
| Revenue growth | -4.6% | 7.0% | 3.7% | 3.7% | -9.4% | |
| EBITDA growth | 205.4% | 68.3% | 19.0% | 37.5% | 0.4% | |
| Gross Margin | 50.9% | 53.2% | 55.6% | 60.5% | 67.4% | 6.9% |
| EBITDA Margin | 10.0% | 15.7% | 18.0% | 23.8% | 26.4% | 2.6% |
| Net Income Margin | 8.8% | -2.4% | 12.5% | 22.6% | 18.2% | -4.5% |
| SG&A, % of revenue | | 24.5% | 23.0% | 21.4% | 25.2% | 3.8% |
| CAPEX, % of revenue | 1.5% | 4.3% | 5.7% | 1.6% | 2.7% | 1.1% |
| ROIC | 3.5% | 7.8% | 11.0% | 14.7% | 12.9% | -1.7% |
| ROE | 7.2% | -2.0% | 10.6% | 17.3% | 11.0% | -6.3% |
| Net Debt/EBITDA | -9.3x | -5.9x | -5.5x | -4.7x | -5.5x | -0.8x |
RDM Corp ($RC) key quoterly financial indicators
| mln. $ | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 5 | 5 | 5 | 6 | -7.1% | -10.8% | -9.8% | -9.8% |
| EBITDA | 2 | 1 | 1 | 2 | 32.2% | -10.5% | -22.5% | 4.4% |
| Net Income | 1 | 1 | 1 | 2 | -8.6% | -15.2% | -55.4% | -23.8% |
Balance Sheet
|
|---|
| Cash | 28 | 29 | 29 | 31 | 21.2% | 24.1% | 19.5% | 17.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 67.2% | 68.8% | 68.3% | 65.6% | 8.4% | 9.1% | 6.5% | 3.6% |
| EBITDA Margin | 30.9% | 23.1% | 20.9% | 30.1% | 9.2% | 0.1% | -3.4% | 4.1% |
| Net Income Margin | 18.9% | 13.0% | 11.5% | 28.5% | -0.3% | -0.7% | -11.8% | -5.2% |
Revenue and profitability
RDM Corp's Revenue decreased on 9.4%. Revenue decline showed acceleration in FY16Q4 - it was 9.8% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.6 pp from 23.8% to 26.4% in FY2016.
Gross Margin increased on 6.9 pp from 60.5% to 67.4% in FY2016. SG&A as a % of Revenue increased on 3.8 pp from 21.4% to 25.2% in FY2016.
Net Income marign decreased on 4.5 pp from 22.6% to 18.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.7% in FY2016. The company's CAPEX/Revenue decreased slightly on 1.5 pp from 4.3% in FY2013 to 2.7% in FY2016. Average CAPEX/Revenue for the last three years was 3.3%.
Return on investment
The company operates at good ROIC (12.95%) while ROE is low (11.05%). ROIC decreased slightly on 1.7 pp from 14.7% to 12.9% in FY2016. ROE decreased on 6.3 pp from 17.3% to 11.0% in FY2016.
Leverage (Debt)
The company has no debt. Cash jumped on 17.6%.
Appendix 1: Peers in Communications
Below you can find RDM Corp benchmarking vs. other companies in Communications 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 |
|---|
| 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 |
|---|
