Espial Group Inc reports 483% Net Income decline while 15.3% Revenue growth
23.02.2017 • About Espial Group Inc (
$ESP) • By InTwits
Espial Group Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Espial Group Inc doesn't have a profitable business model yet: FY2016 ROIC is -8.2%
- The company operates at negative EBITDA Margin: -12.1%
- Espial Group Inc spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 is 0.0%. Average EBITDA Margin for the same period was -2.6%0
- Espial Group Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's in pair with industry average of 1.7%.
- CAPEX is quite volatile: 0.44 in FY2016, 0.53 in FY2015, 0.38 in FY2014, 0.030 in FY2013, 0.21 in FY2012
- The company has unprofitable business model: ROIC is at -8.2%
- It operates with high leverage: Net Debt/EBITDA is 3.3x while industry average is -4.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Espial Group Inc ($ESP) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 13.281 | 12.549 | 20.004 | 24.835 | 28.645 | 15.3% |
| Gross Profit | 10.295 | 10.250 | 15.706 | 18.462 | 21.404 | 15.9% |
| SG&A | 5.808 | 5.911 | 6.835 | 8.466 | 9.713 | 14.7% |
| EBITDA | -0.889 | -2.055 | 2.309 | 1.528 | -3.455 | -326.1% |
| Net Income | -2.707 | -5.529 | 1.172 | 1.272 | -4.875 | -483.2% |
Balance Sheet
|
|---|
| Cash | 3.056 | 7.407 | 18.111 | 49.947 | 43.048 | -13.8% |
| Short Term Debt | 3.010 | 2.442 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 3.257 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.211 | 0.030 | 0.383 | 0.533 | 0.444 | -16.7% |
Ratios
|
|---|
| Revenue growth | -9.5% | -5.5% | 59.4% | 24.2% | 15.3% | |
| EBITDA growth | 44.3% | 131.0% | -212.4% | -33.8% | -326.1% | |
| Gross Margin | 77.5% | 81.7% | 78.5% | 74.3% | 74.7% | 0.4% |
| EBITDA Margin | -6.7% | -16.4% | 11.5% | 6.2% | -12.1% | -18.2% |
| Net Income Margin | -20.4% | -44.1% | 5.9% | 5.1% | -17.0% | -22.1% |
| SG&A, % of revenue | 43.7% | 47.1% | 34.2% | 34.1% | 33.9% | -0.2% |
| CAPEX, % of revenue | 1.6% | 0.2% | 1.9% | 2.1% | 1.5% | -0.6% |
| ROIC | -14.3% | -27.0% | 9.3% | 1.5% | -8.2% | -9.6% |
| ROE | -26.3% | -68.0% | 8.0% | 3.1% | -8.6% | -11.7% |
| Net Debt/EBITDA | | | -7.8x | -32.7x | | 32.7x |
Espial Group Inc ($ESP) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 5 | 5 | 6 | 13 | -1.7% | -17.3% | -30.9% | 144.8% |
| EBITDA | -2 | -2 | -2 | 3 | -434.5% | | -210.7% | |
| Net Income | -2 | -3 | -2 | 2 | -647.7% | | -210.6% | |
Balance Sheet
|
|---|
| Cash | 49 | 46 | 44 | 43 | 173.6% | -5.0% | -6.8% | -13.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 63.8% | 72.7% | 70.9% | 81.8% | -14.6% | -0.5% | -6.5% | 15.6% |
| EBITDA Margin | -29.2% | -54.5% | -37.3% | 22.1% | -37.8% | -53.5% | -60.6% | 39.6% |
| Net Income Margin | -37.0% | -64.8% | -40.5% | 19.4% | -43.6% | -59.7% | -65.8% | 38.8% |
Revenue and profitability
The company's Revenue surged on 15.3%. Revenue growth showed acceleration in FY16Q4 - it increased 144.8% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 18.2 pp from 6.2% to -12.1% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign dropped on 22.1 pp from 5.1% to -17.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Espial Group Inc's CAPEX/Revenue was 1.5% in FY2016. Espial Group Inc showed small growth in CAPEX/Revenue of 1.3 pp from 0.24% in FY2013 to 1.5% in FY2016. It's average level of CAPEX/Revenue for the last three years was 1.9%.
Return on investment
The company operates at negative ROIC (-8.15%) and ROE (-8.60%). ROIC decreased on 9.6 pp from 1.5% to -8.2% in FY2016. ROE dropped on 11.7 pp from 3.1% to -8.6% in FY2016.
Leverage (Debt)
The company has no debt. Cash dropped on 13.8%.
Appendix 1: Peers in Technology
Below you can find Espial Group 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) | | 2.3% | 11.5% | 10.1% | 10.0% |
|---|
| Espial Group Inc ($ESP) | | -5.5% | 59.4% | 24.2% | 15.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 86.2% | 85.5% | 86.1% | 86.2% | 87.1% |
| ProntoForms Corp ($PFM) | 96.1% | 98.1% | 98.0% | 79.4% | |
| Halogen Software Inc ($HGN) | 72.0% | 74.8% | 71.8% | 73.8% | 76.2% |
| Kinaxis Inc ($KXS) | 71.8% | 70.4% | 70.4% | 71.8% | 69.1% |
| Symbility Solutions Inc ($SY) | 80.6% | 79.9% | 81.0% | 70.7% | |
| |
|---|
| Median (11 companies) | 62.8% | 46.3% | 53.5% | 53.0% | 69.1% |
|---|
| Espial Group Inc ($ESP) | 77.5% | 81.7% | 78.5% | 74.3% | 74.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wi-LAN Inc ($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% | 4.3% | -1.9% | 12.4% |
|---|
| Espial Group Inc ($ESP) | -6.7% | -16.4% | 11.5% | 6.2% | -12.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kinaxis Inc ($KXS) | 2.9% | 2.3% | 5.0% | 4.7% | 5.0% |
| Halogen Software Inc ($HGN) | 4.9% | 9.0% | 8.4% | 2.9% | 2.6% |
| ProntoForms Corp ($PFM) | 1.1% | 0.8% | 3.6% | 1.9% | |
| Critical Control Energy Services Corp ($CCZ) | | 0.5% | 1.0% | 1.6% | |
| Data Group Ltd ($DGI) | 0.6% | 0.7% | 1.0% | 1.4% | 1.0% |
| |
|---|
| Median (13 companies) | 1.1% | 1.2% | 1.2% | 1.1% | 0.9% |
|---|
| Espial Group Inc ($ESP) | 1.6% | 0.2% | 1.9% | 2.1% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($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 ($WIN) | 2.6% | -7.6% | 8.9% | 7.4% | 8.4% |
| NexJ Systems Inc ($NXJ) | | -44.6% | -19.8% | -13.9% | 4.5% |
| |
|---|
| Median (13 companies) | -2.4% | -12.5% | 0.2% | -7.5% | 10.5% |
|---|
| Espial Group Inc ($ESP) | -14.3% | -27.0% | 9.3% | 1.5% | -8.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mitel Networks Corp ($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 (6 companies) | 0.9x | 1.5x | 0.6x | -0.7x | -6.3x |
|---|
| Espial Group Inc ($ESP) | | | -7.8x | -32.7x | |
