EnerCare Inc revenue growth accelerated to 76.6% in 2016 vs. 55.7% a year earliner
07.03.2017 • About EnerCare Inc (
$ECI) • By InTwits
EnerCare Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 26.6% in 2016 vs. 39.3% in 2015 vs. 52.8% in 2012
- EnerCare Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.4%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: 9.2 in 2016, 10.7 in 2015, 19.7 in 2014, 9.7 in 2013, 4.3 in 2012
- The company has business model with low profitability: ROIC is at 8.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
EnerCare Inc ($ECI) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 275.1 | 298.8 | 361.9 | 563.6 | 995.3 | 76.6% |
| Gross Profit | 204.1 | 208.1 | 245.6 | 368.7 | 535.6 | 45.3% |
| SG&A | 43.6 | 44.0 | 71.0 | 144.3 | 266.3 | 84.6% |
| EBITDA | 145.3 | 152.5 | 164.7 | 221.4 | 264.6 | 19.5% |
| Net Income | -3.2 | 8.8 | 22.3 | 51.0 | 61.1 | 20.0% |
Balance Sheet
|
|---|
| Cash | 12.6 | 25.9 | 68.1 | 28.4 | 38.4 | 35.2% |
| Short Term Debt | 1.2 | 1.2 | 3.2 | 3.1 | 263.9 | 8,542.3% |
| Long Term Debt | 528.3 | 539.1 | 692.0 | 740.9 | 730.9 | -1.3% |
Cash flow
|
|---|
| Capex | 70.8 | 79.3 | 85.6 | 116.9 | 154.0 | 31.7% |
Ratios
|
|---|
| Revenue growth | 12.8% | 8.6% | 21.1% | 55.7% | 76.6% | |
| EBITDA growth | 0.9% | 4.9% | 8.0% | 34.4% | 19.5% | |
| Gross Margin | 74.2% | 69.7% | 67.8% | 65.4% | 53.8% | -11.6% |
| EBITDA Margin | 52.8% | 51.0% | 45.5% | 39.3% | 26.6% | -12.7% |
| Net Income Margin | -1.2% | 3.0% | 6.2% | 9.0% | 6.1% | -2.9% |
| SG&A, % of revenue | 15.9% | 14.7% | 19.6% | 25.6% | 26.8% | 1.2% |
| CAPEX, % of revenue | 25.7% | 26.5% | 23.6% | 20.7% | 15.5% | -5.3% |
| ROIC | 5.4% | 7.1% | 5.9% | 7.5% | 8.0% | 0.5% |
| ROE | -2.9% | 10.6% | 8.1% | 11.7% | 12.1% | 0.4% |
| Net Debt/EBITDA | 3.6x | 3.4x | 3.8x | 3.2x | 3.6x | 0.4x |
EnerCare Inc ($ECI) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 143 | 244 | 316 | 293 | 0.6% | 80.7% | 117.3% | 107.0% |
| EBITDA | 52 | 68 | 74 | 110 | 0.3% | 19.1% | 31.5% | 94.7% |
| Net Income | 8 | 16 | 19 | 18 | 3.7% | -0.9% | 47.3% | 27.9% |
Balance Sheet
|
|---|
| Cash | 18 | 28 | 39 | 38 | -26.7% | -22.5% | 32.1% | 35.2% |
| Short Term Debt | 3 | 10 | 13 | 264 | -10.2% | 202.1% | 306.9% | 8,542.3% |
| Long Term Debt | 741 | 966 | 972 | 731 | 7.2% | 39.8% | 40.7% | -1.3% |
Ratios
|
|---|
| Gross Margin | 65.2% | 55.8% | 49.2% | 51.6% | 2.4% | -13.0% | -13.8% | -15.6% |
| EBITDA Margin | 36.3% | 28.0% | 23.4% | 37.5% | -0.1% | -14.5% | -15.2% | -2.4% |
| Net Income Margin | 5.7% | 6.6% | 6.1% | 6.0% | 0.2% | -5.4% | -2.9% | -3.7% |
Revenue and profitability
The company's Revenue surged on 76.6%. Revenue growth showed acceleration in 16Q4 - it increased 107.0% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 23.4 pp from 2.6% to -20.8% in 2016.
Gross Margin dropped on 11.6 pp from 65.4% to 53.8% in 2016. SG&A as a % of Revenue increased slightly on 1.2 pp from 25.6% to 26.8% in 2016.
Net Income marign decreased on 2.9 pp from 9.0% to 6.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
EnerCare Inc's CAPEX/Revenue was 15.5% in 2016. CAPEX/Revenue dropped on 11.1 pp from 26.5% in 2013 to 15.5% in 2016. Average CAPEX/Revenue for the last three years was 20.0%.To fuel this fast growth the company invested a large share of EBITDA (58.2%) to CAPEX.
Return on investment
The company operates at good ROE (12.15%) while ROIC is low (8.01%). ROIC increased slightly on 0.51 pp from 7.5% to 8.0% in 2016. ROE showed almost no change in 2016.
Leverage (Debt)
Debt level is 3.6x Net Debt / EBITDA and 3.8x Debt / EBITDA. Net Debt / EBITDA surged on 0.4x from 3.2x to 3.6x in 2016. Debt surged on 33.7% while cash surged on 35.2%.
Management team
The company's CEO is John A Macdonald. John A Macdonald is a founder and has 7 years tenure at the company. Evelyn Louise Sutherland is a The company's CFO. Evelyn Louise Sutherland has spent 7 years at the company.
Appendix 1: Peers in Consumer, Non-cyclical
Below you can find EnerCare Inc benchmarking vs. other companies in Consumer, Non-cyclical 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 |
|---|
| Concordia Healthcare Corp ($CXR) | | | 159.5% | 275.7% | 107.0% |
| Heritage Global Inc ($HGP) | | -37.0% | 76.2% | 11.2% | 80.8% |
| CRH Medical Corp ($CRH) | | 12.5% | 56.0% | 284.2% | 70.2% |
| Nuvo Research Inc ($NRI) | | -25.3% | -29.1% | 57.0% | 31.9% |
| Savaria Corp ($SIS) | | 13.5% | 9.5% | 14.9% | 25.7% |
| |
|---|
| Median (40 companies) | | 9.0% | 13.7% | 14.9% | 12.6% |
|---|
| EnerCare Inc ($ECI) | | 8.6% | 21.1% | 55.7% | 76.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cipher Pharmaceuticals Inc ($CPH) | | 99.5% | 98.3% | 92.7% | |
| Ritchie Bros Auctioneers Inc ($RBA) | 88.7% | 88.4% | 88.0% | 89.1% | 88.3% |
| Information Services Corp ($ISV) | 77.5% | 80.4% | 80.9% | 87.6% | 85.1% |
| Biosyent Inc ($RX) | 79.3% | 79.2% | 78.1% | 78.7% | |
| Concordia Healthcare Corp ($CXR) | | 79.4% | 86.0% | 76.1% | 72.9% |
| |
|---|
| Median (34 companies) | 29.5% | 35.0% | 35.6% | 33.4% | 28.9% |
|---|
| EnerCare Inc ($ECI) | 74.2% | 69.7% | 67.8% | 65.4% | 53.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CRH Medical Corp ($CRH) | 21.0% | 24.5% | 29.1% | 44.1% | |
| Valeant Pharmaceuticals International Inc ($VRX) | 30.6% | 27.8% | 45.6% | 39.8% | 23.8% |
| Concordia Healthcare Corp ($CXR) | | 43.7% | 37.0% | 39.8% | -92.8% |
| Ritchie Bros Auctioneers Inc ($RBA) | 36.8% | 36.3% | 36.4% | 39.7% | 31.4% |
| Information Services Corp ($ISV) | 39.6% | 39.6% | 37.6% | 36.1% | 32.7% |
| |
|---|
| Median (43 companies) | 9.1% | 12.0% | 12.7% | 11.0% | 10.0% |
|---|
| EnerCare Inc ($ECI) | 52.8% | 51.0% | 45.5% | 39.3% | 26.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| ProMetic Life Sciences Inc ($PLI) | 2.1% | 33.6% | 34.6% | 23.3% | |
| Black Diamond Group Ltd ($BDI) | 61.9% | 27.5% | 31.0% | 17.6% | |
| easyhome Ltd ($EH) | 32.2% | 25.6% | 21.6% | 16.9% | 12.7% |
| K-Bro Linen Inc ($KBL) | 10.0% | 19.0% | 11.4% | 16.6% | |
| TearLab Corp ($TLB) | 14.4% | 19.8% | 12.3% | 13.5% | |
| |
|---|
| Median (42 companies) | 3.1% | 2.7% | 2.3% | 2.3% | 2.0% |
|---|
| EnerCare Inc ($ECI) | 25.7% | 26.5% | 23.6% | 20.7% | 15.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Information Services Corp ($ISV) | 71.8% | 72.8% | 58.9% | 38.1% | 27.6% |
| Colliers International Group Inc ($CIG) | 10.5% | 11.2% | 15.2% | 10.9% | 26.1% |
| Nuvo Research Inc ($NRI) | -11.6% | -17.4% | -37.9% | 12.9% | 20.8% |
| International Road Dynamics Inc ($IRD) | 0.9% | 6.7% | 4.4% | 10.6% | 16.5% |
| Premium Brands Holdings Corp ($PBH) | 10.3% | 9.9% | 6.9% | 12.6% | 15.3% |
| |
|---|
| Median (43 companies) | 8.8% | 9.2% | 8.5% | 6.3% | 8.4% |
|---|
| EnerCare Inc ($ECI) | 5.4% | 7.1% | 5.9% | 7.5% | 8.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Concordia Healthcare Corp ($CXR) | | -1.3x | 5.6x | 20.2x | |
| SunOpta Inc ($SOY) | 2.9x | 3.5x | 1.3x | 16.9x | 140.8x |
| Centric Health Corp ($CHH) | 5.6x | 10.2x | 11.2x | 15.6x | |
| Sienna Senior Living Inc ($SIA) | 9.5x | 11.8x | 9.2x | 9.1x | 9.1x |
| Valeant Pharmaceuticals International Inc ($VRX) | 9.5x | 10.4x | 4.0x | 7.3x | 12.7x |
| |
|---|
| Median (37 companies) | 2.8x | 2.2x | 3.3x | 2.3x | 2.7x |
|---|
| EnerCare Inc ($ECI) | 3.6x | 3.4x | 3.8x | 3.2x | 3.6x |
