Alarmforce Industries Inc reports 112% Net Income decline
30.01.2017 • About Alarmforce Industries Inc (
$AF) • By InTwits
Alarmforce Industries Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Alarmforce Industries Inc doesn't have a profitable business model yet: FY2016 ROIC is 0.8%
- Alarmforce Industries Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.1%. At the same time it's a lot of higher than industry average of 7.1%.
- CAPEX is quite volatile: 2.8 in 2016, 2.3 in 2015, 0.83 in 2014, 0.49 in 2013, 1.2 in 2012
- The company has potentially unprofitable business model: ROIC is at 0.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Alarmforce Industries Inc ($AF) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 44.837 | 49.108 | 52.582 | 55.214 | 56.361 | 2.1% |
| Gross Profit | 33.643 | 37.565 | 37.941 | 38.183 | 37.993 | -0.5% |
| SG&A | | 24.532 | 22.082 | 27.305 | 31.545 | 15.5% |
| EBITDA | 6.265 | | | | | |
| Net Income | 1.163 | 5.447 | 7.812 | 4.420 | -0.510 | -111.5% |
Balance Sheet
|
|---|
| Cash | 2.949 | 2.296 | 4.741 | 6.133 | 12.713 | 107.3% |
| 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 | 6.537 | 6.592 | 5.140 | 4.278 | 5.675 | 32.7% |
Ratios
|
|---|
| Revenue growth | 9.7% | 9.5% | 7.1% | 5.0% | 2.1% | |
| EBITDA growth | -37.2% | | | | | |
| Gross Margin | 75.0% | 76.5% | 72.2% | 69.2% | 67.4% | -1.7% |
| EBITDA Margin | 14.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Net Income Margin | 2.6% | 11.1% | 14.9% | 8.0% | -0.9% | -8.9% |
| SG&A, % of revenue | | 50.0% | 42.0% | 49.5% | 56.0% | 6.5% |
| CAPEX, % of revenue | 14.6% | 13.4% | 9.8% | 7.7% | 10.1% | 2.3% |
| ROIC | 5.3% | 24.0% | 33.9% | 19.0% | 0.8% | -18.2% |
| ROE | 3.6% | 16.4% | 24.3% | 14.1% | -1.7% | -15.8% |
| Net Debt/EBITDA | -0.5x | | | | | 0.0x |
Alarmforce Industries Inc ($AF) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 14 | 14 | 14 | 13 | 4.9% | 3.2% | 0.5% | -2.2% |
| Net Income | 2 | 2 | -2 | -3 | -11.5% | 6.4% | | -416.0% |
Balance Sheet
|
|---|
| Cash | 7 | 13 | 13 | 13 | 2.5% | 129.7% | 153.5% | 107.3% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 69.4% | 68.4% | 69.6% | 60.6% | -7.8% | -4.9% | 6.5% | -2.6% |
| Net Income Margin | 14.3% | 12.5% | -11.6% | -22.9% | -2.6% | 0.4% | -7.6% | -30.1% |
Revenue and profitability
The company's Revenue increased on 2.1%. Revenue growth showed slow down in FY16Q4 - it was -2.2% YoY.
Gross Margin decreased slightly on 1.7 pp from 69.2% to 67.4% in FY2016. SG&A as a % of Revenue increased on 6.5 pp from 49.5% to 56.0% in FY2016.
Net Income marign decreased on 8.9 pp from 8.0% to -0.90% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Alarmforce Industries Inc had CAPEX/Revenue of 10.1%. The company's CAPEX/Revenue decreased on 3.4 pp from 13.4% in FY2013 to 10.1% in FY2016. It's average CAPEX/Revenue for the last three years was 9.2%.
Return on investment
The company operates at low but positive ROIC (0.78%) and negative ROE (-1.69%). ROIC dropped on 18.2 pp from 19.0% to 0.78% in FY2016. ROE dropped on 15.8 pp from 14.1% to -1.7% in FY2016.
Leverage (Debt)
The company has no debt. Cash jumped on 107%.
Appendix 1: Peers in Industrial
Below we provide Alarmforce Industries Inc benchmarking against other companies in Industrial industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Progressive Waste Solutions Ltd ($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 |
|---|
