Canyon Services Group Inc reports 232% EBITDA decline and 19.8 pp EBITDA Margin decline from 6.1% to -13.6%
02.03.2017 • About Canyon Services Group Inc (
$FRC) • By InTwits
Canyon Services Group Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Canyon Services Group Inc is a company in decline: 2016 revenue growth was -40.7%, 5 years revenue CAGR was -8.4%
- EBITDA Margin is quite volatile: -13.6% in 2016, 6.1% in 2015, 19.9% in 2014, 9.4% in 2013, 29.5% in 2012
- Canyon Services Group Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.5%. At the same time it's a lot of higher than industry average of 7.1%.
- CAPEX is quite volatile: 15.7 in 2016, 28.9 in 2015, 113 in 2014, 14.8 in 2013, 69.9 in 2012
- The company has unprofitable business model: ROIC is at -21.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Canyon Services Group Inc ($FRC) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 353.1 | 299.6 | 591.0 | 404.0 | 239.6 | -40.7% |
| Gross Profit | 97.3 | 19.8 | 104.8 | 3.5 | -49.4 | -1,492.2% |
| SG&A | 23.1 | 24.5 | 36.6 | 33.3 | 20.4 | -38.7% |
| EBITDA | 104.2 | 28.3 | 117.5 | 24.8 | -32.7 | -231.7% |
| Net Income | 54.4 | -4.4 | 49.1 | -62.1 | -72.2 | |
Balance Sheet
|
|---|
| Cash | 22.6 | 21.3 | 20.6 | 3.1 | 2.5 | -19.2% |
| Short Term Debt | 2.1 | 2.7 | 14.3 | 3.9 | 1.7 | -55.3% |
| Long Term Debt | 3.5 | 3.1 | 36.2 | 64.8 | 28.5 | -56.0% |
Cash flow
|
|---|
| Capex | 69.9 | 14.8 | 112.7 | 28.9 | 15.7 | -45.5% |
Ratios
|
|---|
| Revenue growth | -5.1% | -15.2% | 97.3% | -31.6% | -40.7% | |
| EBITDA growth | -31.8% | -72.8% | 315.1% | -78.9% | -231.7% | |
| Gross Margin | 27.5% | 6.6% | 17.7% | 0.9% | -20.6% | -21.5% |
| EBITDA Margin | 29.5% | 9.4% | 19.9% | 6.1% | -13.6% | -19.8% |
| Net Income Margin | 15.4% | -1.5% | 8.3% | -15.4% | -30.1% | -14.8% |
| SG&A, % of revenue | 6.5% | 8.2% | 6.2% | 8.2% | 8.5% | 0.3% |
| CAPEX, % of revenue | 19.8% | 5.0% | 19.1% | 7.1% | 6.6% | -0.6% |
| ROIC | 21.1% | -1.4% | 16.2% | -7.5% | -21.1% | -13.7% |
| ROE | 16.7% | -1.4% | 13.6% | -16.2% | -20.9% | -4.7% |
| Net Debt/EBITDA | -0.2x | -0.5x | 0.3x | 2.6x | | -2.6x |
Canyon Services Group Inc ($FRC) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 71 | 26 | 62 | 80 | -54.2% | -40.4% | -44.0% | -14.6% |
| EBITDA | -9 | -15 | -6 | -2 | -150.3% | | -150.1% | -136.7% |
| Net Income | -21 | -23 | -17 | -12 | | | | |
Balance Sheet
|
|---|
| Cash | 2 | 1 | 1 | 2 | -77.5% | -85.0% | -75.6% | -19.2% |
| Short Term Debt | 3 | 2 | 2 | 2 | -84.8% | -89.6% | -80.7% | -55.3% |
| Long Term Debt | 5 | 9 | 18 | 28 | -89.2% | -81.3% | -73.8% | -56.0% |
Ratios
|
|---|
| Gross Margin | -15.8% | -68.8% | -19.4% | -10.4% | -23.2% | -30.1% | -26.9% | -10.7% |
| EBITDA Margin | -12.0% | -59.9% | -10.4% | -2.8% | -22.9% | -33.9% | -22.1% | -9.3% |
| Net Income Margin | -28.9% | -87.9% | -26.9% | -15.2% | -28.2% | -37.2% | -8.1% | 4.2% |
Revenue and profitability
Canyon Services Group Inc's Revenue dropped on 40.7%. Annual revenue decline showed slowdown in 16Q4 - revenue dropped on 14.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 6.3 pp from -7.1% to -0.78% in 2016.
Gross Margin dropped on 21.5 pp from 0.88% to -20.6% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign dropped on 14.8 pp from -15.4% to -30.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
Canyon Services Group Inc's CAPEX/Revenue was 6.6% in 2016. Canyon Services Group Inc's CAPEX/Revenue increased slightly on 1.6 pp from 5.0% in 2013 to 6.6% in 2016. It's average CAPEX/Revenue for the last three years was 10.9%.
Return on investment
The company operates at negative ROIC (-21.12%) and ROE (-20.89%). ROIC dropped on 13.7 pp from -7.5% to -21.1% in 2016. ROE decreased on 4.7 pp from -16.2% to -20.9% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.4x and Debt / EBITDA is . Net Debt / EBITDA dropped on 2.6x from 2.6x to in 2016. Debt dropped on 56.0% while cash dropped on 19.2%.
Management team
Canyon Services Group Inc's CEO Bradley P D Fedora "Brad" is a founder and has spent 9 years at the company. The company's CFO Barry J O'Brien has spent 11 years at the company.
Appendix 1: Peers in Energy
Below you can find Canyon Services Group 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% |
|---|
| Canyon Services Group Inc ($FRC) | | -15.2% | 97.3% | -31.6% | -40.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% | 32.2% | 32.4% | 33.9% | 32.5% |
|---|
| Canyon Services Group Inc ($FRC) | 27.5% | 6.6% | 17.7% | 0.9% | -20.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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% | 35.7% | 28.9% | 9.0% | 29.2% |
|---|
| Canyon Services Group Inc ($FRC) | 29.5% | 9.4% | 19.9% | 6.1% | -13.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% |
|---|
| Canyon Services Group Inc ($FRC) | 19.8% | 5.0% | 19.1% | 7.1% | 6.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% | 5.8% | 5.5% | -8.5% | -1.9% |
|---|
| Canyon Services Group Inc ($FRC) | 21.1% | -1.4% | 16.2% | -7.5% | -21.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 | 2.6x | 2.7x |
|---|
| Canyon Services Group Inc ($FRC) | -0.2x | -0.5x | 0.3x | 2.6x | |
