Pason Systems Inc reports 76.3% CAPEX decline and 43.7% Revenue decline
22.02.2017 • About Pason Systems Inc (
$PSI) • By InTwits
Pason Systems Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Pason Systems Inc is a company in decline: 2016 revenue growth was -43.7%, 5 years revenue CAGR was -14.3%
- Pason Systems Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.8%. At the same time it's in pair with industry average of 7.1%.
- CAPEX is quite volatile: 10.5 in 2016, 44.3 in 2015, 114 in 2014, 56.2 in 2013, 58.6 in 2012
- The company has unprofitable business model: ROIC is at -3.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Pason Systems Inc ($PSI) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 386.5 | 403.1 | 499.3 | 285.1 | 160.4 | -43.7% |
| Gross Profit | 245.5 | 250.8 | 323.9 | 167.6 | 80.3 | -52.1% |
| SG&A | 19.9 | 18.6 | 18.8 | 16.5 | 9.7 | -41.0% |
| EBITDA | 179.4 | 172.4 | 250.2 | 112.0 | 41.6 | -62.9% |
| Net Income | 39.9 | 23.7 | 112.1 | -14.6 | -40.6 | |
Balance Sheet
|
|---|
| Cash | 138.3 | 78.0 | 144.9 | 195.8 | 146.5 | -25.2% |
| 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 | 58.6 | 56.2 | 113.7 | 44.3 | 10.5 | -76.3% |
Ratios
|
|---|
| Revenue growth | 11.7% | 4.3% | 23.9% | -42.9% | -43.7% | |
| EBITDA growth | 3.2% | -3.9% | 45.1% | -55.2% | -62.9% | |
| Gross Margin | 63.5% | 62.2% | 64.9% | 58.8% | 50.1% | -8.7% |
| EBITDA Margin | 46.4% | 42.8% | 50.1% | 39.3% | 25.9% | -13.4% |
| Net Income Margin | 10.3% | 5.9% | 22.5% | -5.1% | -25.3% | -20.2% |
| SG&A, % of revenue | 5.2% | 4.6% | 3.8% | 5.8% | 6.1% | 0.3% |
| CAPEX, % of revenue | 15.2% | 13.9% | 22.8% | 15.5% | 6.5% | -9.0% |
| ROIC | 30.0% | 29.7% | 41.0% | 6.0% | -3.1% | -9.1% |
| ROE | 10.8% | 6.4% | 26.4% | -3.0% | -9.3% | -6.3% |
| Net Debt/EBITDA | -0.8x | -0.5x | -0.6x | -1.7x | -3.5x | -1.8x |
Pason Systems Inc ($PSI) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 46 | 27 | 39 | 49 | -53.9% | -52.7% | -43.6% | -18.4% |
| EBITDA | 12 | 0 | 11 | 18 | -75.1% | -92.7% | -62.2% | 0.5% |
| Net Income | -11 | -11 | -7 | -11 | -176.5% | | | |
Balance Sheet
|
|---|
| Cash | 176 | 162 | 155 | 146 | -8.2% | -17.0% | -22.0% | -25.2% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 48.1% | 37.5% | 53.2% | 56.4% | -13.4% | -12.1% | -6.6% | 5.3% |
| EBITDA Margin | 26.5% | 1.4% | 28.4% | 37.0% | -22.5% | -7.6% | -14.0% | 7.0% |
| Net Income Margin | -23.7% | -41.7% | -18.4% | -23.2% | -38.0% | -25.3% | 8.7% | -21.8% |
Revenue and profitability
Pason Systems Inc's Revenue dropped on 43.7%. Annual revenue decline showed slowdown in 16Q4 - revenue dropped on 18.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 190 pp from -116% to 74.4% in 2016.
Gross Margin decreased on 8.7 pp from 58.8% to 50.1% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign dropped on 20.2 pp from -5.1% to -25.3% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Pason Systems Inc had CAPEX/Revenue of 6.5%. The company's CAPEX/Revenue decreased on 7.4 pp from 13.9% in 2013 to 6.5% in 2016. For the last three years the average CAPEX/Revenue was 14.9%.
Return on investment
The company operates at negative ROIC (-3.08%) and ROE (-9.27%). ROIC decreased on 9.1 pp from 6.0% to -3.1% in 2016. ROE decreased on 6.3 pp from -3.0% to -9.3% in 2016.
Leverage (Debt)
The company has no debt. Cash dropped on 25.2%.
Management team
The company's CEO is Marcel Kessler. Marcel Kessler is a founder and has 7 years tenure at the company. Pason Systems Inc's CFO Jon Faber has spent 4 years at the company.
Appendix 1: Peers in Energy
Below you can find Pason Systems Inc benchmarking vs. other companies in Energy 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 |
|---|
| Oryx Petroleum Corp Ltd ($OXC) | | | | -18.4% | 141.2% |
| Seven Generations Energy Ltd ($VII) | | 115.7% | 340.2% | 39.0% | 94.4% |
| Athabasca Oil Corp ($ATH) | | 342.7% | 5.5% | -22.9% | 73.1% |
| Painted Pony Petroleum Ltd ($PPY) | | 41.3% | 56.0% | -42.5% | 60.7% |
| ONEnergy Inc ($OEG) | | | 6,002.6% | 231.5% | 57.4% |
| |
|---|
| Median (116 companies) | | 16.2% | 16.9% | -27.7% | -18.0% |
|---|
| Pason Systems Inc ($PSI) | | 4.3% | 23.9% | -42.9% | -43.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($BOE) | 77.1% | 43.3% | -34.3% | 121.1% | |
| TransAlta Renewables Inc ($RNW) | | 94.4% | 94.5% | 94.5% | 91.1% |
| Serinus Energy Inc ($SEN) | 80.5% | 76.5% | 86.8% | 88.5% | |
| Advantage Oil & Gas Ltd ($AAV) | 62.0% | 84.5% | 92.5% | 88.5% | 90.3% |
| Polaris Infrastructure Inc ($PIF) | 39.9% | 33.6% | 32.0% | 86.7% | 88.6% |
| |
|---|
| Median (114 companies) | 32.0% | 32.1% | 32.2% | 33.6% | 31.5% |
|---|
| Pason Systems Inc ($PSI) | 63.5% | 62.2% | 64.9% | 58.8% | 50.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($GXO) | 59.4% | 64.5% | 70.8% | 201.9% | |
| Perpetual Energy Inc ($PMT) | 35.5% | 70.7% | 58.0% | 110.3% | |
| Petro Rio SA ($PRJ) | -4,809.7% | -6,899.7% | 28.2% | 90.7% | |
| Peyto Exploration & Development Corp ($PEY) | 86.1% | 83.2% | 86.3% | 84.6% | 80.7% |
| Innergex Renewable Energy Inc ($INE) | 111.8% | 110.0% | 82.9% | 83.4% | 83.5% |
| |
|---|
| Median (128 companies) | 25.3% | 34.1% | 28.9% | 8.1% | 29.2% |
|---|
| Pason Systems Inc ($PSI) | 46.4% | 42.8% | 50.1% | 39.3% | 25.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($OXC) | | | 1,997.8% | 712.8% | |
| WesternZagros Resources Ltd ($WZR) | | | | 385.6% | |
| Athabasca Oil Corp ($ATH) | 2,426.4% | 596.6% | 504.7% | 315.2% | 83.7% |
| TORC Oil & Gas Ltd ($TOG) | 453.8% | 466.9% | 104.5% | 229.4% | 76.3% |
| Seven Generations Energy Ltd ($VII) | 452.8% | 513.1% | 227.4% | 191.2% | 73.5% |
| |
|---|
| Median (129 companies) | 43.8% | 39.2% | 45.6% | 28.1% | 23.8% |
|---|
| Pason Systems Inc ($PSI) | 15.2% | 13.9% | 22.8% | 15.5% | 6.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($ERF) | -17.3% | 10.2% | 11.5% | -55.5% | 16.3% |
| Whitecap Resources Inc ($WCP) | 7.1% | 8.1% | 9.6% | -10.6% | 10.1% |
| Ecopetrol SA ($ECP) | 29.3% | 24.4% | 16.5% | 3.0% | 9.6% |
| Parkland Fuel Corp ($PKI) | 22.3% | 23.3% | 9.9% | 7.8% | 8.6% |
| Inter Pipeline Ltd ($IPL) | 9.5% | 8.0% | 7.5% | 9.6% | 8.5% |
| |
|---|
| Median (128 companies) | 3.6% | 5.4% | 5.5% | -8.5% | -1.9% |
|---|
| Pason Systems Inc ($PSI) | 30.0% | 29.7% | 41.0% | 6.0% | -3.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($PXX) | -0.2x | -0.1x | 0.2x | 3,726.1x | -0.2x |
| Paramount Resources Ltd ($POU) | 14.6x | 23.9x | 8.9x | 421.5x | -5.8x |
| Precision Drilling Corp ($PD) | 2.2x | 1.9x | 2.0x | 68.4x | 7.6x |
| Trican Well Service Ltd ($TCW) | 2.5x | 3.4x | 2.9x | 31.4x | |
| Trilogy Energy Corp ($TET) | 2.6x | 1.8x | 2.3x | 25.5x | 7.3x |
| |
|---|
| Median (78 companies) | 1.6x | 1.5x | 1.4x | 2.7x | 2.7x |
|---|
| Pason Systems Inc ($PSI) | -0.8x | -0.5x | -0.6x | -1.7x | -3.5x |
