Horizon North Logistics Inc EBITDA dropped on 52.8% in 2016 and EBITDA Margin decreased on 4.8 pp from 15.9% to 11.1%
01.03.2017 • About Horizon North Logistics Inc (
$HNL) • By InTwits
Horizon North Logistics Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Horizon North Logistics Inc is a company in decline: 2016 revenue growth was -32.2%, 5 years revenue CAGR was -9.0%
- EBITDA Margin is declining: 11.1% in 2016 vs. 15.9% in 2015 vs. 27.2% in 2012
- Horizon North Logistics Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.7%. At the same time it's a lot of higher than industry average of 7.1%.
- CAPEX is quite volatile: 30.3 in 2016, 54.4 in 2015, 115 in 2014, 90.1 in 2013, 139 in 2012
- The company has unprofitable business model: ROIC is at -5.1%
- It operates with high leverage: Net Debt/EBITDA is 2.7x while industry average is 2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Horizon North Logistics Inc ($HNL) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 526.6 | 554.4 | 476.1 | 369.9 | 250.9 | -32.2% |
| Gross Profit | 162.3 | 145.4 | 115.8 | 85.6 | 46.8 | -45.3% |
| SG&A | 17.2 | 19.0 | 22.9 | 23.2 | 18.1 | -21.7% |
| EBITDA | 143.1 | 118.0 | 94.4 | 58.9 | 27.8 | -52.8% |
| Net Income | 72.9 | 42.5 | 23.6 | -0.8 | -20.3 | |
Balance Sheet
|
|---|
| Cash | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Short Term Debt | 1.4 | 1.5 | 7.7 | 0.0 | 0.0 | |
| Long Term Debt | 116.9 | 78.3 | 146.4 | 57.5 | 75.3 | 30.8% |
Cash flow
|
|---|
| Capex | 139.3 | 90.1 | 114.6 | 54.4 | 30.3 | -44.4% |
Ratios
|
|---|
| Revenue growth | 30.7% | 5.3% | -14.1% | -22.3% | -32.2% | |
| EBITDA growth | 54.6% | -17.6% | -20.0% | -37.6% | -52.8% | |
| Gross Margin | 30.8% | 26.2% | 24.3% | 23.1% | 18.6% | -4.5% |
| EBITDA Margin | 27.2% | 21.3% | 19.8% | 15.9% | 11.1% | -4.8% |
| Net Income Margin | 13.8% | 7.7% | 5.0% | -0.2% | -8.1% | -7.9% |
| SG&A, % of revenue | 3.3% | 3.4% | 4.8% | 6.3% | 7.2% | 1.0% |
| CAPEX, % of revenue | 26.5% | 16.3% | 24.1% | 14.7% | 12.1% | -2.7% |
| ROIC | 28.1% | 15.1% | 8.5% | 1.1% | -5.1% | -6.1% |
| ROE | 29.7% | 14.9% | 8.1% | -0.3% | -6.2% | -5.9% |
| Net Debt/EBITDA | 0.8x | 0.7x | 1.6x | 1.0x | 2.7x | 1.7x |
Horizon North Logistics Inc ($HNL) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 78 | 53 | 60 | 60 | -41.8% | -38.1% | -27.0% | -12.1% |
| EBITDA | 13 | 3 | 7 | 5 | -55.5% | -69.5% | -49.7% | -24.3% |
| Net Income | -0 | -8 | -5 | -7 | -102.5% | | | |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 0 | 0 | | | | |
| Short Term Debt | 0 | 0 | 0 | 0 | -100.0% | -100.0% | -100.0% | |
| Long Term Debt | 70 | 47 | 73 | 75 | -48.2% | -59.0% | 54.4% | 30.8% |
Ratios
|
|---|
| Gross Margin | 22.4% | 15.8% | 20.3% | 14.7% | -3.8% | -3.1% | -4.6% | -5.7% |
| EBITDA Margin | 16.5% | 5.5% | 11.7% | 8.3% | -5.0% | -5.6% | -5.3% | -1.3% |
| Net Income Margin | -0.3% | -15.2% | -8.1% | -11.9% | -8.0% | -8.2% | -7.9% | -4.7% |
Revenue and profitability
The company's Revenue dropped on 32.2%. Annual revenue decline showed slowdown in 16Q4 - revenue dropped on 12.1%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.8 pp from 15.9% to 11.1% in 2016.
Gross Margin decreased on 4.5 pp from 23.1% to 18.6% in 2016. SG&A as a % of Revenue increased slightly on 0.97 pp from 6.3% to 7.2% in 2016.
Net Income marign decreased on 7.9 pp from -0.22% to -8.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
Horizon North Logistics Inc's CAPEX/Revenue was 12.1% in 2016. Horizon North Logistics Inc showed decline in CAPEX/Revenue of 4.2 pp from 16.3% in 2013 to 12.1% in 2016. Average CAPEX/Revenue for the last three years was 17.0%.Battling declining revenue Horizon North Logistics Inc made large investments to CAPEX (109% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-5.09%) and ROE (-6.18%). ROIC decreased on 6.1 pp from 1.1% to -5.1% in 2016. ROE decreased on 5.9 pp from -0.27% to -6.2% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.7x and Debt / EBITDA is 2.7x. Net Debt / EBITDA surged on 1.7x from 1.0x to 2.7x in 2016. Debt jumped on 30.8% while cash didn't change in 2016.
Management team
The company's CEO is Roderick W Graham "Rod". Roderick W Graham "Rod" is a founder and has 4 years tenure at the company. Horizon North Logistics Inc's CFO is Scott Matson. Scott Matson has 8 years tenure at the company.
Appendix 1: Peers in Industrial
Below we provide Horizon North Logistics Inc benchmarking against other companies in Industrial industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
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) | | 4.9% | 10.4% | 8.5% | 3.2% |
|---|
| Horizon North Logistics Inc ($HNL) | | 5.3% | -14.1% | -22.3% | -32.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pure Technologies Ltd ($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 (49 companies) | 23.4% | 23.4% | 20.9% | 21.5% | 22.9% |
|---|
| Horizon North Logistics Inc ($HNL) | 30.8% | 26.2% | 24.3% | 23.1% | 18.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canadian National Railway Co ($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) | 10.2% | 8.3% | 8.0% | 7.8% | 11.1% |
|---|
| Horizon North Logistics Inc ($HNL) | 27.2% | 21.3% | 19.8% | 15.9% | 11.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newalta Corp ($NAL) | 21.7% | 34.5% | 35.1% | 42.0% | 9.6% |
| 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% |
| |
|---|
| Median (54 companies) | 3.2% | 3.6% | 4.3% | 3.7% | 3.9% |
|---|
| Horizon North Logistics Inc ($HNL) | 26.5% | 16.3% | 24.1% | 14.7% | 12.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| IBI Group Inc ($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% | 9.6% | 11.5% | 8.9% | 9.7% |
|---|
| Horizon North Logistics Inc ($HNL) | 28.1% | 15.1% | 8.5% | 1.1% | -5.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Conifex Timber Inc ($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 (49 companies) | 1.5x | 1.6x | 1.2x | 1.0x | 1.8x |
|---|
| Horizon North Logistics Inc ($HNL) | 0.8x | 0.7x | 1.6x | 1.0x | 2.7x |
