Vecima Networks Inc EBITDA jumped on 228% and Revenue jumped on 13.4%
24.09.2020 • About Vecima Networks Inc (
$VCM) • By InTwits
Vecima Networks Inc reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 17.0% in FY2020, 5.9% in FY2019, 15.6% in FY2018, 21.6% in FY2017, 30.3% in FY2016
- Vecima Networks Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.5%. At the same time it's in pair with industry average of 5.6%
- CAPEX is quite volatile: 1 CADm in FY2020, 19 CADm in FY2019, 2 CADm in FY2018, 2 CADm in FY2017, 5 CADm in FY2016
- The company has potentially unprofitable business model: ROIC is 0.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 13.4%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 11.1 pp from 5.9% to 17.0% in FY2020. During the last 5 years EBITDA Margin bottomed in FY2019 at 5.9%.
Gross Margin increased slightly on 1.5 pp from 52.8% to 54.2% in FY2020. SG&A as a % of Revenue decreased on 4.5 pp from 34.6% to 30.1% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue topped in FY2019 at 34.6%.
Net Income margin increased on 5.9 pp from -4.1% to 1.9% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Vecima Networks Inc had CAPEX/Revenue of 1.2%. The company showed small CAPEX/Revenue decline of 1.1 pp from 2.2% in FY2017 to 1.2% in FY2020. Average CAPEX/Revenue for the last three years was 8.6%.
Return on investment
The company operates at low ROIC (0.1%) and ROE (1.0%). ROIC increased on 3.8 pp from -3.6% to 0.12% in FY2020. ROE increased on 2.9 pp from -1.9% to 1.0% in FY2020. During the last 5 years ROIC bottomed in FY2019 at -3.6%. ROE followed a declining trend at -3.8 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.7x and Debt / EBITDA is 0.4x. Debt surged on 219% while cash dropped on 12.5%.
Vecima Networks Inc has no short term refinancing risk: cash is higher than short term debt (1,021.8%).
Valuation and dividends
Vecima Networks Inc's trades at EV/EBITDA 17.4x and P/E 164.0x.
Financial and operational results
FY ended 30.06.2020
Vecima Networks Inc ($VCM) key annual financial indicators| mln. CAD | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 108.4 | 71.5 | 78.1 | 85.0 | 96.4 | 13.4% |
| Gross Profit | 61.8 | 37.0 | 41.9 | 44.9 | 52.3 | 16.5% |
| SG&A | 20.2 | 15.2 | 23.7 | 29.4 | 29.0 | -1.4% |
| EBITDA | 32.9 | 15.5 | 12.2 | 5.0 | 16.4 | 228.2% |
| Net Income | 22.0 | 18.0 | 10.8 | -3.5 | 1.8 | |
Balance Sheet
|
|---|
| Cash | 22.2 | 3.5 | 11.0 | 19.8 | 17.4 | -12.5% |
| Short Term Debt | 0.3 | 0.3 | 0.3 | 0.3 | 1.7 | 579.2% |
| Long Term Debt | 2.5 | 2.2 | 2.0 | 1.7 | 4.6 | 166.8% |
Cash flow
|
|---|
| Capex | 5.2 | 1.6 | 1.8 | 18.9 | 1.1 | -94.1% |
Ratios
|
|---|
| Revenue growth | 19.2% | -34.1% | 9.3% | 8.9% | 13.4% | |
| EBITDA growth | 49.4% | -52.9% | -21.1% | -59.1% | 228.2% | |
|
|---|
| Gross Margin | 57.0% | 51.8% | 53.6% | 52.8% | 54.2% | 1.5% |
| EBITDA Margin | 30.3% | 21.6% | 15.6% | 5.9% | 17.0% | 11.1% |
| SG&A, % of revenue | 18.6% | 21.2% | 30.4% | 34.6% | 30.1% | -4.5% |
| Net Income Margin | 20.3% | 25.3% | 13.8% | -4.1% | 1.9% | 5.9% |
| CAPEX, % of revenue | 4.8% | 2.2% | 2.3% | 22.3% | 1.2% | -21.1% |
|
|---|
| ROIC | 19.3% | 5.1% | 1.8% | -3.6% | 0.1% | 3.8% |
| ROE | 13.7% | 10.3% | 5.8% | -1.9% | 1.0% | 2.9% |
| Net Debt/EBITDA | -0.6x | -0.1x | -0.7x | -3.6x | -0.7x | 2.9x |
Vecima Networks Inc ($VCM) key quoterly financial indicators
| mln. CAD | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 20 | 25 | 25 | 26 | | - | - | - | - |
| EBITDA | 1 | 7 | 4 | 4 | | - | - | - | - |
| Net Income | -1 | 4 | 1 | -1 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 18 | 23 | 19 | 17 | | - | - | - | - |
| Short Term Debt | 2 | 2 | 2 | 2 | | - | - | - | - |
| Long Term Debt | 6 | 5 | 5 | 5 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 52.1% | 63.7% | 51.9% | 49.1% | | - | - | - | - |
| EBITDA Margin | 5.8% | 27.9% | 15.1% | 17.0% | | - | - | - | - |
| Net Income Margin | -6.9% | 14.2% | 2.7% | -4.0% | | - | - | - | - |
Peers in Communications
Below we provide Vecima Networks Inc benchmarking against other companies in Communications industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Armada Data Corp ($ARD) | - | 5.9% | 23.4% | -2.3% | 13.7% |
| iSIGN Media Solutions Inc ($ISD) | - | 70.9% | -90.9% | 38.5% | 10.1% |
| Uniserve Communications Corp ($USS) | - | 12.5% | 24.1% | 39.0% | 0.9% |
| EXFO Inc ($EXF) | - | 4.6% | 10.8% | 6.4% | -7.4% |
| Tucows Inc ($TC) | - | 73.5% | 5.0% | -2.6% | -7.7% |
| |
|---|
| Median (6 companies) | 2.3% | 12.5% | 10.8% | 22.5% | -3.3% |
|---|
| Vecima Networks Inc ($VCM) | - | -34.1% | 9.3% | 8.9% | 13.4% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| EXFO Inc ($EXF) | 62.6% | 61.2% | 61.0% | 58.6% | 56.9% |
| Uniserve Communications Corp ($USS) | 50.2% | 48.9% | 44.4% | 36.9% | 34.2% |
| Tucows Inc ($TC) | 33.2% | 25.7% | 28.0% | 29.9% | 27.5% |
| Plaintree Systems Inc ($NPT) | 11.5% | 11.6% | 27.6% | 28.4% | 22.2% |
| iSIGN Media Solutions Inc ($ISD) | 12.7% | 25.7% | -84.0% | 19.9% | 20.1% |
| |
|---|
| Median (5 companies) | 40.1% | 30.8% | 36.2% | 29.9% | 27.5% |
|---|
| Vecima Networks Inc ($VCM) | 57.0% | 51.8% | 53.6% | 52.8% | 54.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Tucows Inc ($TC) | 14.7% | 11.9% | 12.8% | 15.3% | 10.7% |
| Plaintree Systems Inc ($NPT) | -4.4% | -3.8% | 15.7% | 16.3% | 7.3% |
| Armada Data Corp ($ARD) | 19.2% | 14.7% | 14.2% | -0.1% | 6.3% |
| EXFO Inc ($EXF) | 8.9% | 6.5% | 4.2% | 6.6% | 5.0% |
| Uniserve Communications Corp ($USS) | -8.7% | 2.9% | -28.9% | -14.9% | -6.3% |
| |
|---|
| Median (6 companies) | 6.8% | 2.9% | 4.2% | 3.3% | 5.6% |
|---|
| Vecima Networks Inc ($VCM) | 30.3% | 21.6% | 15.6% | 5.9% | 17.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Tucows Inc ($TC) | 4.2% | 3.9% | 8.1% | 13.1% | 14.3% |
| EXFO Inc ($EXF) | 1.9% | 2.9% | 3.9% | 2.6% | 2.9% |
| Uniserve Communications Corp ($USS) | 3.7% | 2.4% | 9.8% | 0.6% | 1.5% |
| Armada Data Corp ($ARD) | 0.2% | 0.3% | 0.2% | 0.4% | 0.3% |
| Plaintree Systems Inc ($NPT) | 2.2% | 1.9% | 2.0% | 3.2% | 0.1% |
| |
|---|
| Median (6 companies) | 2.6% | 1.9% | 2.0% | 2.9% | 0.9% |
|---|
| Vecima Networks Inc ($VCM) | 4.8% | 2.2% | 2.3% | 22.3% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Armada Data Corp ($ARD) | 68.1% | 48.3% | 52.5% | -1.0% | 12.5% |
| Tucows Inc ($TC) | 58.3% | 25.6% | 18.0% | 15.5% | 3.0% |
| Plaintree Systems Inc ($NPT) | -44.7% | -174.1% | 269.1% | 72.4% | 2.7% |
| EXFO Inc ($EXF) | 9.1% | 4.6% | -2.2% | 2.4% | -1.1% |
| Uniserve Communications Corp ($USS) | - | - | -652.3% | -243.8% | -155.8% |
| |
|---|
| Median (6 companies) | 0.1% | 4.6% | 18.0% | 2.4% | 2.7% |
|---|
| Vecima Networks Inc ($VCM) | 19.3% | 5.1% | 1.8% | -3.6% | 0.1% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Tucows Inc ($TC) | -0.2x | 1.5x | 1.2x | 2.0x | 3.7x |
| EXFO Inc ($EXF) | -2.1x | -2.4x | 0.6x | -0.3x | 1.1x |
| Plaintree Systems Inc ($NPT) | - | - | 0.9x | 0.3x | 0.9x |
| Armada Data Corp ($ARD) | 0.1x | -0.8x | -0.9x | - | -0.7x |
| |
|---|
| Median (4 companies) | 1.6x | 0.3x | 0.7x | 0.3x | 1.0x |
|---|
| Vecima Networks Inc ($VCM) | -0.6x | -0.1x | -0.7x | -3.6x | -0.7x |
