EcoSynthetix Inc CAPEX jumped on 1,896% in 2016 while Revenue decreased on 9.0%
07.03.2017 • About EcoSynthetix Inc (
$ECO) • By InTwits
EcoSynthetix Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EcoSynthetix Inc is a company in decline: 2016 revenue growth was -9.0%, 5 years revenue CAGR was -8.6%
- The company operates at negative EBITDA Margin: -63.8%
- EcoSynthetix Inc spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2012-2016 is 0.0%. Average EBITDA Margin for the same period was -66.4%0
- EcoSynthetix Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 32.6%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 15.6 in 2016, 0.78 in 2015, 0.43 in 2014, 1.9 in 2013, 5.7 in 2012
- The company has unprofitable business model: ROIC is at -14.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
EcoSynthetix Inc ($ECO) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 19.552 | 22.230 | 18.842 | 14.583 | 13.277 | -9.0% |
| Gross Profit | 3.858 | 3.609 | 3.171 | 2.082 | 2.201 | 5.7% |
| SG&A | | 12.917 | 12.447 | 8.489 | 6.533 | -23.0% |
| EBITDA | -10.584 | -13.391 | -13.078 | -13.270 | -8.467 | |
| Net Income | -11.431 | -14.765 | -14.515 | -14.421 | -9.305 | |
Balance Sheet
|
|---|
| Cash | 93.260 | 80.507 | 67.246 | 60.718 | 38.517 | -36.6% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 5.748 | 1.889 | 0.426 | 0.781 | 15.585 | 1,895.8% |
Ratios
|
|---|
| Revenue growth | -5.9% | 13.7% | -15.2% | -22.6% | -9.0% | |
| EBITDA growth | 93.2% | 26.5% | -2.3% | 1.5% | -36.2% | |
| Gross Margin | 19.7% | 16.2% | 16.8% | 14.3% | 16.6% | 2.3% |
| EBITDA Margin | -54.1% | -60.2% | -69.4% | -91.0% | -63.8% | 27.2% |
| Net Income Margin | -58.5% | -66.4% | -77.0% | -98.9% | -70.1% | 28.8% |
| SG&A, % of revenue | | 58.1% | 66.1% | 58.2% | 49.2% | -9.0% |
| CAPEX, % of revenue | 29.4% | 8.5% | 2.3% | 5.4% | 117.4% | 112.0% |
| ROIC | -9.9% | -14.2% | -16.0% | -18.7% | -14.4% | 4.2% |
| ROE | -9.6% | -13.8% | -15.6% | -18.3% | -13.7% | 4.6% |
EcoSynthetix Inc ($ECO) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 3 | 3 | 3 | 5 | -28.9% | -28.8% | -18.3% | 56.6% |
| EBITDA | -2 | -2 | -2 | -2 | | | | |
| Net Income | -2 | -3 | -2 | -2 | | | | |
Balance Sheet
|
|---|
| Cash | 44 | 42 | 39 | 39 | -31.6% | -31.9% | -36.7% | -36.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 16.1% | 15.7% | 15.2% | 18.2% | 2.2% | -1.2% | 0.6% | 7.4% |
| EBITDA Margin | -74.8% | -84.4% | -64.2% | -43.6% | 18.0% | -32.2% | -14.5% | 144.2% |
| Net Income Margin | -79.9% | -90.6% | -70.4% | -50.8% | 19.0% | -31.1% | -12.2% | 147.4% |
Revenue and profitability
EcoSynthetix Inc's Revenue decreased on 9.0%. Annual revenue decline showed slowdown in 16Q4 - revenue surged on 56.6%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 27.2 pp from -91.0% to -63.8% in 2016.
Gross Margin increased on 2.3 pp from 14.3% to 16.6% in 2016. SG&A as a % of Revenue decreased on 9.0 pp from 58.2% to 49.2% in 2016.
Net Income marign jumped on 28.8 pp from -98.9% to -70.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
EcoSynthetix Inc's CAPEX/Revenue was 117% in 2016. CAPEX/Revenue jumped on 109 pp from 8.5% in 2013 to 117% in 2016. For the last three years the average CAPEX/Revenue was 41.7%.
Return on investment
The company operates at negative ROIC (-14.43%) and ROE (-13.69%). ROIC increased on 4.2 pp from -18.7% to -14.4% in 2016. ROE increased on 4.6 pp from -18.3% to -13.7% in 2016.
Leverage (Debt)
The company has no debt. Cash dropped on 36.6%.
Management team
Jeffrey Macdonald "Jeff" is a the company's CEO. Jeffrey Macdonald "Jeff" is a founder and has spent 3 years at the company. The company's CFO Robert Haire has spent 10 years at the company.
Appendix 1: Peers in Basic Materials
Below you can find EcoSynthetix Inc benchmarking vs. other companies in Basic Materials 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 |
|---|
| Avino Silver & Gold Mines Ltd ($ASM) | | 613.6% | 19.9% | -1.1% | 109.1% |
| Trevali Mining Corp ($TV) | | | | 12.9% | 86.4% |
| Geodrill Ltd ($GEO) | | -43.3% | -4.3% | 34.6% | 53.1% |
| Tahoe Resources Inc ($THO) | | | | 48.4% | 50.9% |
| Osisko Gold Royalties Ltd ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -3.8% | 2.0% | -1.7% | 6.8% |
|---|
| EcoSynthetix Inc ($ECO) | | 13.7% | -15.2% | -22.6% | -9.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($NSU) | 89.9% | 94.8% | 95.5% | 82.3% | 79.7% |
| Labrador Iron Ore Royalty Corp ($LIF) | 80.2% | 80.2% | 80.2% | 80.3% | 80.3% |
| Lucara Diamond Corp ($LUC) | 42.5% | 57.4% | 66.7% | 60.9% | 65.6% |
| Trevali Mining Corp ($TV) | | | 49.0% | 59.3% | |
| Perseus Mining Ltd ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.2% | 22.7% | 19.1% | 16.9% | 24.8% |
|---|
| EcoSynthetix Inc ($ECO) | 19.7% | 16.2% | 16.8% | 14.3% | 16.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($LIF) | | | | 72.8% | 73.5% |
| Silver Wheaton Corp ($SLW) | 82.6% | 75.3% | 69.6% | 65.8% | 59.7% |
| Franco-Nevada Corp ($FNV) | 62.1% | 44.6% | 72.3% | 60.8% | 70.3% |
| Lucara Diamond Corp ($LUC) | 7.6% | 57.3% | 57.5% | 60.0% | 62.4% |
| Sandstorm Gold Ltd ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 18.6% | 11.5% | 10.7% | 7.3% | 24.5% |
|---|
| EcoSynthetix Inc ($ECO) | -54.1% | -60.2% | -69.4% | -91.0% | -63.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($LGO) | | | | 567.6% | |
| Sandstorm Gold Ltd ($SSL) | 152.1% | 118.8% | 49.4% | 412.7% | 17.3% |
| Silver Wheaton Corp ($SLW) | 75.5% | 286.8% | 22.5% | 279.2% | 90.3% |
| Franco-Nevada Corp ($FNV) | 3.7% | 35.5% | 201.6% | 230.0% | 122.4% |
| Avino Silver & Gold Mines Ltd ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 27.4% | 27.4% | 17.8% | 17.2% | 17.5% |
|---|
| EcoSynthetix Inc ($ECO) | 29.4% | 8.5% | 2.3% | 5.4% | 117.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($LUC) | -2.9% | 41.3% | 54.7% | 39.6% | 58.5% |
| Western Forest Products Inc ($WEF) | 9.0% | 25.1% | 15.7% | 16.4% | 25.1% |
| Geodrill Ltd ($GEO) | 8.6% | -3.5% | -9.3% | 3.6% | 20.3% |
| Supremex Inc ($SXP) | 14.1% | 18.5% | 16.5% | 23.4% | 19.3% |
| Canfor Pulp Products Inc ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 1.3% | 1.6% | -3.6% | 4.8% |
|---|
| EcoSynthetix Inc ($ECO) | -9.9% | -14.2% | -16.0% | -18.7% | -14.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canam Group Inc ($CAM) | 4.2x | 2.6x | 3.2x | 1.8x | 13.9x |
| Taseko Mines Ltd ($TKO) | 7.4x | 5.9x | 10.2x | 5.9x | 11.0x |
| Methanex Corp ($MX) | 5.2x | 0.7x | 0.9x | 3.0x | 5.2x |
| Copper Mountain Mining Corp ($CUM) | 3.9x | 5.0x | 5.4x | 30.6x | 5.1x |
| Cameco Corp ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| |
|---|
| Median (58 companies) | 0.3x | 0.8x | 1.1x | 1.6x | 0.6x |
|---|
