NexJ Systems Inc revenue surged on 17.3% in 2016 and EBITDA Margin increased on 8.9 pp from -4.1% to 4.9%
15.02.2017 • About NexJ Systems Inc (
$NXJ) • By InTwits
NexJ Systems Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 4.9% in 2016 vs. -4.1% in 2015 vs. -62.0% in 2012
- NexJ Systems Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2012-2016 was 0.0%. On average EBITDA Margin was -27.1% for the sames years0
- NexJ Systems Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 0.031 in FY2016, 0 in FY2015, 0.83 in FY2014, 0 in FY2013, 0.069 in FY2012
- The company has potentially unprofitable business model: ROIC is at 4.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
NexJ Systems Inc ($NXJ) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 26.189 | 27.314 | 23.877 | 28.580 | 33.521 | 17.3% |
| SG&A | 17.266 | 18.416 | 10.258 | 12.117 | 11.569 | -4.5% |
| EBITDA | -16.244 | -17.727 | -4.258 | -1.158 | 1.636 | |
| Net Income | -16.435 | -18.809 | -11.878 | -7.140 | 0.334 | |
Balance Sheet
|
|---|
| Cash | 46.263 | 29.293 | 18.298 | 14.699 | 14.678 | -0.1% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.148 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.160 | |
Cash flow
|
|---|
| Capex | 0.358 | 0.332 | 0.285 | 0.306 | 0.259 | -15.4% |
Ratios
|
|---|
| Revenue growth | -13.4% | 4.3% | -12.6% | 19.7% | 17.3% | |
| EBITDA growth | | 9.1% | -76.0% | -72.8% | -241.3% | |
| EBITDA Margin | -62.0% | -64.9% | -17.8% | -4.1% | 4.9% | 8.9% |
| Net Income Margin | -62.8% | -68.9% | -49.7% | -25.0% | 1.0% | 26.0% |
| SG&A, % of revenue | 65.9% | 67.4% | 43.0% | 42.4% | 34.5% | -7.9% |
| CAPEX, % of revenue | 1.4% | 1.2% | 1.2% | 1.1% | 0.8% | -0.3% |
| ROIC | | -44.6% | -19.8% | -13.9% | 4.5% | 18.4% |
| ROE | | -42.6% | -40.5% | -35.2% | 1.9% | 37.2% |
| Net Debt/EBITDA | | | | | -8.8x | -8.8x |
NexJ Systems Inc ($NXJ) key quoterly financial indicators
| mln. | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 8 | 7 | 9 | 10 | 30.1% | -2.6% | 21.6% | 21.4% |
| EBITDA | -1 | -0 | 1 | 2 | | | 258.4% | |
| Net Income | -2 | -1 | 1 | 2 | | | | |
Balance Sheet
|
|---|
| Cash | 13 | 11 | 14 | 15 | -19.6% | -21.8% | 18.5% | -0.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| EBITDA Margin | -8.8% | -6.9% | 12.3% | 18.1% | 5.2% | 1.4% | 8.2% | 18.1% |
| Net Income Margin | -25.1% | -10.2% | 12.7% | 20.4% | 1.7% | 22.5% | 28.8% | 45.2% |
Revenue and profitability
NexJ Systems Inc's Revenue jumped on 17.3%. Revenue growth showed acceleration in 16Q4 - it increased 21.4% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 13.5 pp from -2.7% to -16.2% in FY2016.
SG&A as a % of Revenue decreased on 7.9 pp from 42.4% to 34.5% in 2016.
Net Income marign jumped on 26.0 pp from -25.0% to 1.00% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 0.77%. NexJ Systems Inc's CAPEX/Revenue showed almost no change from 2013 to 2016. For the last three years the average CAPEX/Revenue was 1.0%.
Return on investment
The company operates at low ROIC (4.49%) and ROE (1.94%). ROIC jumped on 18.4 pp from -13.9% to 4.5% in 2016. ROE jumped on 37.2 pp from -35.2% to 1.9% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -8.8x and Debt / EBITDA is 0.2x. Net Debt / EBITDA dropped8.8x from to -8.8x in 2016. Debt jumped while cash showed almost no change in 2016.
Appendix 1: Peers in Technology
Below you can find NexJ Systems 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% |
| Constellation Software Inc/Canada ($CSU) | | 35.9% | 37.9% | 10.1% | 15.6% |
| Espial Group Inc ($ESP) | | -5.5% | 59.4% | 24.2% | 15.3% |
| |
|---|
| Median (11 companies) | | -1.0% | 15.2% | 10.1% | 10.0% |
|---|
| NexJ Systems Inc ($NXJ) | | 4.3% | -12.6% | 19.7% | 17.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($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 (12 companies) | 71.8% | 55.6% | 61.9% | 61.9% | 71.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wi-LAN Inc ($WIN) | 40.9% | 12.2% | 56.2% | 53.2% | 57.8% |
| Kinaxis Inc ($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 ($MNW) | 10.2% | 10.0% | 7.0% | 7.7% | |
| |
|---|
| Median (13 companies) | 8.5% | 5.5% | 4.5% | 2.1% | 12.4% |
|---|
| NexJ Systems Inc ($NXJ) | -62.0% | -64.9% | -17.8% | -4.1% | 4.9% |
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 ($CCZ) | | 0.5% | 1.0% | 1.6% | |
| |
|---|
| Median (13 companies) | 1.1% | 0.9% | 1.2% | 1.4% | 1.3% |
|---|
| NexJ Systems Inc ($NXJ) | 1.4% | 1.2% | 1.2% | 1.1% | 0.8% |
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 ($HGN) | | -28.4% | -45.9% | -40.5% | 12.6% |
| Wi-LAN Inc ($WIN) | 2.6% | -7.6% | 8.9% | 7.4% | 8.4% |
| Espial Group Inc ($ESP) | -14.3% | -27.0% | 9.3% | 1.5% | -8.2% |
| |
|---|
| Median (13 companies) | -7.5% | -12.5% | 0.9% | 0.1% | 10.5% |
|---|
| NexJ Systems Inc ($NXJ) | | -44.6% | -19.8% | -13.9% | 4.5% |
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 ($CSU) | 0.0x | 1.6x | 0.6x | 0.4x | -0.0x |
| Wi-LAN Inc ($WIN) | -4.9x | -12.1x | -2.3x | -1.7x | -2.0x |
| Kinaxis Inc ($KXS) | 1.9x | 4.7x | -4.2x | -3.9x | -6.3x |
| |
|---|
| Median (7 companies) | 0.9x | 1.5x | -0.8x | -1.7x | -4.1x |
|---|
