Wi-LAN Inc Net Income jumped on 10.1% in 2016 and EBITDA Margin increased on 4.7 pp from 53.2% to 57.8%
09.02.2017 • About Wi-LAN Inc (
$WIN) • By InTwits
Wi-LAN Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Wi-LAN Inc is a company in decline: 2016 revenue growth was -9.7%, 5 years revenue CAGR was -2.6%
- EBITDA Margin is quite volatile: 57.8% in 2016, 53.2% in 2015, 56.2% in 2014, 12.2% in 2013, 40.9% in 2012
- Wi-LAN Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.6%.
- The company has business model with low profitability: ROIC is at 8.4%
- It operates with high leverage: Net Debt/EBITDA is -2.0x while industry average is -4.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Wi-LAN Inc ($WIN) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 88.0 | 88.2 | 98.3 | 102.9 | 92.9 | -9.7% |
| Gross Profit | 32.0 | -0.4 | 35.1 | 32.5 | 28.8 | -11.4% |
| SG&A | 12.3 | 13.1 | 10.6 | 7.5 | 9.8 | 31.3% |
| EBITDA | 36.0 | 10.8 | 55.2 | 54.7 | 53.7 | -1.8% |
| Net Income | -14.5 | -18.1 | 9.7 | 10.0 | 11.1 | 10.1% |
Balance Sheet
|
|---|
| Cash | 175.2 | 130.4 | 126.3 | 93.4 | 106.6 | 14.0% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.4 | 1.8 | 0.4 | 0.2 | 0.0 | -73.0% |
Ratios
|
|---|
| Revenue growth | -16.9% | 0.3% | 11.5% | 4.6% | -9.7% | |
| EBITDA growth | 28.3% | -70.0% | 412.2% | -1.0% | -1.8% | |
| Gross Margin | 36.4% | -0.5% | 35.7% | 31.6% | 31.0% | -0.6% |
| EBITDA Margin | 40.9% | 12.2% | 56.2% | 53.2% | 57.8% | 4.7% |
| Net Income Margin | -16.5% | -20.5% | 9.9% | 9.8% | 11.9% | 2.1% |
| SG&A, % of revenue | 14.0% | 14.8% | 10.7% | 7.3% | 10.5% | 3.3% |
| CAPEX, % of revenue | 0.5% | 2.0% | 0.4% | 0.2% | 0.1% | -0.1% |
| ROIC | 2.6% | -7.6% | 8.9% | 7.4% | 8.4% | 1.1% |
| ROE | -4.7% | -6.6% | 3.9% | 4.1% | 4.6% | 0.4% |
| Net Debt/EBITDA | -4.9x | -12.1x | -2.3x | -1.7x | -2.0x | -0.3x |
Wi-LAN Inc ($WIN) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 30 | 16 | 17 | 30 | 47.8% | -54.4% | -22.7% | 16.0% |
| EBITDA | 20 | 7 | 9 | 17 | 182.3% | -72.1% | -25.5% | 35.9% |
| Net Income | 5 | -3 | 1 | 9 | | -128.8% | -20.7% | 186.9% |
Balance Sheet
|
|---|
| Cash | 101 | 103 | 102 | 107 | -14.1% | -9.1% | 8.0% | 14.0% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 40.3% | -1.1% | 26.7% | 40.9% | 35.7% | -55.0% | 4.6% | 10.5% |
| EBITDA Margin | 65.2% | 44.0% | 56.5% | 57.9% | 31.0% | -28.0% | -2.1% | 8.5% |
| Net Income Margin | 16.3% | -19.7% | 4.0% | 28.6% | 39.6% | -51.1% | 0.1% | 17.0% |
Revenue and profitability
Wi-LAN Inc's Revenue decreased on 9.7%. Annual revenue decline showed slowdown in 16Q4 - revenue jumped on 16.0%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 4.7 pp from 53.2% to 57.8% in 2016.
Gross Margin decreased slightly on 0.58 pp from 31.6% to 31.0% in 2016. SG&A as a % of Revenue increased on 3.3 pp from 7.3% to 10.5% in 2016.
Net Income marign increased on 2.1 pp from 9.8% to 11.9% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.052% in 2016. CAPEX/Revenue decreased slightly on 2.0 pp from 2.0% in 2013 to 0.052% in 2016. Average CAPEX/Revenue for the last three years was 0.22%.
Return on investment
The company operates at low ROIC (8.41%) and ROE (4.55%). ROIC increased slightly on 1.1 pp from 7.4% to 8.4% in 2016. ROE showed almost no change in 2016.
Leverage (Debt)
The company has no debt. Cash surged on 14.0%.
Appendix 1: Peers in Technology
Below you can find Wi-LAN Inc benchmarking vs. other companies in Technology 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 |
|---|
| Intrinsyc Technologies Corp ($ITC) | | -21.7% | 70.8% | 24.5% | 39.2% |
| ProntoForms Corp ($PFM) | | 75.4% | 43.9% | 46.4% | 28.2% |
| Kinaxis Inc ($KXS) | | 30.3% | 15.2% | 30.3% | 27.0% |
| NexJ Systems Inc ($NXJ) | | 4.3% | -12.6% | 19.7% | 17.3% |
| Constellation Software Inc/Canada ($CSU) | | 35.9% | 37.9% | 10.1% | 15.6% |
| |
|---|
| Median (11 companies) | | 1.0% | 15.2% | 12.8% | 15.3% |
|---|
| Wi-LAN Inc ($WIN) | | 0.3% | 11.5% | 4.6% | -9.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 86.2% | 85.5% | 86.1% | 86.2% | 87.1% |
| ProntoForms Corp ($PFM) | 96.1% | 98.1% | 98.0% | 79.4% | |
| Espial Group Inc ($ESP) | 77.5% | 81.7% | 78.5% | 74.3% | 74.7% |
| Halogen Software Inc ($HGN) | 72.0% | 74.8% | 71.8% | 73.8% | 76.2% |
| Kinaxis Inc ($KXS) | 71.8% | 70.4% | 70.4% | 71.8% | 69.1% |
| |
|---|
| Median (11 companies) | 71.9% | 63.0% | 70.4% | 70.7% | 74.7% |
|---|
| Wi-LAN Inc ($WIN) | 36.4% | -0.5% | 35.7% | 31.6% | 31.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kinaxis Inc ($KXS) | 18.7% | 23.0% | 19.2% | 28.0% | 17.6% |
| Constellation Software Inc/Canada ($CSU) | 20.9% | 20.1% | 21.8% | 25.2% | 26.0% |
| Intrinsyc Technologies Corp ($ITC) | -10.5% | -38.8% | 2.2% | 10.8% | |
| Mitel Networks Corp ($MNW) | 10.2% | 10.0% | 7.0% | 7.7% | |
| Espial Group Inc ($ESP) | -6.7% | -16.4% | 11.5% | 6.2% | -12.1% |
| |
|---|
| Median (13 companies) | -6.7% | 2.2% | 4.3% | -1.9% | 6.0% |
|---|
| Wi-LAN Inc ($WIN) | 40.9% | 12.2% | 56.2% | 53.2% | 57.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kinaxis Inc ($KXS) | 2.9% | 2.3% | 5.0% | 4.7% | 5.0% |
| Halogen Software Inc ($HGN) | 4.9% | 9.0% | 8.4% | 2.9% | 2.6% |
| Espial Group Inc ($ESP) | 1.6% | 0.2% | 1.9% | 2.1% | 1.5% |
| ProntoForms Corp ($PFM) | 1.1% | 0.8% | 3.6% | 1.9% | |
| Critical Control Energy Services Corp ($CCZ) | | 0.5% | 1.0% | 1.6% | |
| |
|---|
| Median (13 companies) | 1.2% | 0.9% | 1.2% | 1.4% | 1.3% |
|---|
| Wi-LAN Inc ($WIN) | 0.5% | 2.0% | 0.4% | 0.2% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 45.9% | 22.4% | 24.7% | 38.5% | 40.5% |
| Kinaxis Inc ($KXS) | | 61.8% | 63.6% | 44.0% | 22.6% |
| Halogen Software Inc ($HGN) | | -28.4% | -45.9% | -40.5% | 12.6% |
| NexJ Systems Inc ($NXJ) | | -44.6% | -19.8% | -13.9% | 4.5% |
| Espial Group Inc ($ESP) | -14.3% | -27.0% | 9.3% | 1.5% | -8.2% |
| |
|---|
| Median (13 companies) | -8.9% | -20.1% | 0.2% | -7.5% | 8.5% |
|---|
| Wi-LAN Inc ($WIN) | 2.6% | -7.6% | 8.9% | 7.4% | 8.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mitel Networks Corp ($MNW) | 3.7x | 3.8x | 2.6x | 6.2x | |
| Pivot Technology Solutions Inc ($PTG) | | -0.4x | 1.1x | 4.8x | |
| Constellation Software Inc/Canada ($CSU) | 0.0x | 1.6x | 0.6x | 0.4x | -0.0x |
| Kinaxis Inc ($KXS) | 1.9x | 4.7x | -4.2x | -3.9x | -6.3x |
| Intrinsyc Technologies Corp ($ITC) | | | -19.5x | -4.4x | |
| |
|---|
| Median (6 companies) | 1.9x | 1.6x | 0.6x | -1.8x | -6.8x |
|---|
| Wi-LAN Inc ($WIN) | -4.9x | -12.1x | -2.3x | -1.7x | -2.0x |
