Newalta Corp reports 85.7% CAPEX decline and 37.3% Revenue decline
23.02.2017 • About Newalta Corp (
$NAL) • By InTwits
Newalta Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Newalta Corp is a company in decline: 2016 revenue growth was -37.3%, 5 years revenue CAGR was -21.4%
- The company operates at negative EBITDA Margin: -32.5%
- Newalta Corp spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2012-2016 is 0.0%. Average EBITDA Margin for the same period was -8.0%0
- Newalta Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 28.6%. At the same time it's a lot of higher than industry average of 7.1%.
- CAPEX is quite volatile: 19.7 in 2016, 137 in 2015, 174 in 2014, 142 in 2013, 158 in 2012
- The company has unprofitable business model: ROIC is at -21.0%
- It operates with high leverage: Net Debt/EBITDA is 70.0x while industry average is 2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Newalta Corp ($NAL) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 726.2 | 412.2 | 495.3 | 327.6 | 205.4 | -37.3% |
| Gross Profit | 169.8 | 144.9 | 162.2 | | | |
| SG&A | 100.0 | 92.7 | 97.1 | 45.5 | 31.1 | -31.7% |
| EBITDA | | | | -106.6 | -66.7 | |
| Net Income | 42.8 | 21.9 | -142.7 | -183.1 | -158.5 | |
Balance Sheet
|
|---|
| Cash | 0.4 | 0.0 | 4.1 | 0.7 | 0.4 | -33.6% |
| Short Term Debt | 0.0 | 1.3 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 322.8 | 364.1 | 453.9 | 328.7 | 319.9 | -2.7% |
Cash flow
|
|---|
| Capex | 157.7 | 142.1 | 173.9 | 137.4 | 19.7 | -85.7% |
Ratios
|
|---|
| Revenue growth | 6.4% | -43.2% | 20.2% | -33.9% | -37.3% | |
| EBITDA growth | | | | | -37.4% | |
| Gross Margin | 23.4% | 35.1% | 32.7% | | | 0.0% |
| EBITDA Margin | 0.0% | 0.0% | 0.0% | -32.5% | -32.5% | 0.1% |
| Net Income Margin | 5.9% | 5.3% | -28.8% | -55.9% | -77.1% | -21.3% |
| SG&A, % of revenue | 13.8% | 22.5% | 19.6% | 13.9% | 15.1% | 1.2% |
| CAPEX, % of revenue | 21.7% | 34.5% | 35.1% | 42.0% | 9.6% | -32.4% |
| ROIC | 6.8% | 4.8% | 3.6% | -19.8% | -21.0% | -1.2% |
| ROE | 7.2% | 3.3% | -23.8% | -42.4% | -55.7% | -13.2% |
Newalta Corp ($NAL) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 49 | 42 | 51 | 64 | -50.1% | -49.0% | -38.6% | -1.5% |
| EBITDA | -27 | -2 | 7 | -44 | | -134.1% | -36.4% | |
| Net Income | -41 | -21 | -20 | -75 | | | | |
Balance Sheet
|
|---|
| Cash | 4 | 2 | 2 | 0 | -60.6% | | -36.5% | -33.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | -100.0% | | |
| Long Term Debt | 351 | 306 | 317 | 320 | 29.5% | 3.2% | 1.7% | -2.7% |
Ratios
|
|---|
| EBITDA Margin | -55.3% | -5.3% | 13.3% | -69.7% | -46.7% | -13.3% | 0.5% | 108.8% |
| Net Income Margin | -84.9% | -51.4% | -39.6% | -118.3% | -56.4% | -35.2% | -20.9% | 77.1% |
Revenue and profitability
The company's Revenue dropped on 37.3%. Annual revenue decline showed slowdown in 16Q4 - revenue decreased slightly on 1.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 11.6 pp from 38.6% to 50.2% in 2016.
SG&A as a % of Revenue increased slightly on 1.2 pp from 13.9% to 15.1% in 2016.
Net Income marign dropped on 21.3 pp from -55.9% to -77.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 9.6%. The company's CAPEX/Revenue dropped on 24.9 pp from 34.5% in 2013 to 9.6% in 2016. It's average CAPEX/Revenue for the last three years was 28.9%.
Return on investment
The company operates at negative ROIC (-21.03%) and ROE (-55.65%). ROIC decreased slightly on 1.2 pp from -19.8% to -21.0% in 2016. ROE dropped on 13.2 pp from -42.4% to -55.7% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 70.0x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2016. Debt decreased on 2.7% while cash dropped on 33.6%.
Management team
Newalta Corp's CEO John Barkhouse is a founder and has spent 4 years at the company. The company's CFO is Linda Dietsche. Linda Dietsche has 4 years tenure at the company.
Appendix 1: Peers in Industrial
Below you can find Newalta Corp benchmarking vs. other companies in Industrial 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 |
|---|
| 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 (51 companies) | | 5.3% | 9.9% | 8.5% | 3.2% |
|---|
| Newalta Corp ($NAL) | | -43.2% | 20.2% | -33.9% | -37.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pure Technologies Ltd ($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) | 23.9% | 23.4% | 20.9% | 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 ($WPK) | 19.5% | 18.6% | 18.7% | 22.7% | 23.5% |
| |
|---|
| Median (53 companies) | 10.4% | 8.4% | 8.4% | 9.5% | 11.1% |
|---|
| Newalta Corp ($NAL) | | | | -32.5% | -32.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% |
| ENTREC Corp ($ENT) | 35.0% | 26.7% | 29.5% | 18.0% | |
| |
|---|
| Median (54 companies) | 3.2% | 3.6% | 4.3% | 3.7% | 3.9% |
|---|
| Newalta Corp ($NAL) | 21.7% | 34.5% | 35.1% | 42.0% | 9.6% |
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 ($ITP) | 12.3% | 13.7% | 22.5% | 23.0% | 21.0% |
| |
|---|
| Median (55 companies) | 12.2% | 9.7% | 11.5% | 8.9% | 9.7% |
|---|
| Newalta Corp ($NAL) | 6.8% | 4.8% | 3.6% | -19.8% | -21.0% |
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 |
|---|
