Somero Enterprise Inc reports 23.4% Net Income growth and 13.0% Revenue growth
15 Mar 2017 • About Somero Enterprise Inc (
$SOMA) • By InTwits
Somero Enterprise Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Somero Enterprise Inc is a fast growth stock: FY2016 revenue growth was 13.0%, 5 year revenue CAGR was 29.4% at FY2016 ROIC 51.7%
- EBITDA Margin is expanding: 30.1% in FY2016 vs. 28.2% in FY2015 vs. 12.6% in FY2012
- Somero Enterprise Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's in pair with industry average of 3.2%.
- CAPEX is quite volatile: 4.4 in FY2016, 4.2 in FY2015, 1.2 in FY2014, 0.80 in FY2013, 0.55 in FY2012
- The company has highly profitable business model: ROIC is at 51.7%
- It operates with high leverage: Net Debt/EBITDA is -0.8x while industry average is -35.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Somero Enterprise Inc ($SOMA) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 32.171 | 45.078 | 59.277 | 70.222 | 79.353 | 13.0% |
| Gross Profit | 15.660 | 23.542 | 31.987 | 39.163 | 45.083 | 15.1% |
| SG&A | | 16.258 | 18.229 | 20.559 | 22.824 | 11.0% |
| EBITDA | 4.044 | 10.780 | 16.235 | 19.837 | 23.854 | 20.3% |
| Net Income | 1.020 | 5.380 | 14.541 | 11.550 | 14.258 | 23.4% |
Balance Sheet
|
|---|
| Cash | 1.167 | 5.983 | 7.950 | 13.709 | 21.216 | 54.8% |
| Short Term Debt | 0.511 | 1.265 | 0.266 | 0.048 | 0.016 | -66.7% |
| Long Term Debt | 2.568 | 1.338 | 1.072 | 1.024 | 0.970 | -5.3% |
Cash flow
|
|---|
| Capex | 0.554 | 0.795 | 1.221 | 4.162 | 4.435 | 6.6% |
Ratios
|
|---|
| Revenue growth | 47.1% | 40.1% | 31.5% | 18.5% | 13.0% | |
| EBITDA growth | 380.3% | 166.6% | 50.6% | 22.2% | 20.3% | |
| Gross Margin | 48.7% | 52.2% | 54.0% | 55.8% | 56.8% | 1.0% |
| EBITDA Margin | 12.6% | 23.9% | 27.4% | 28.2% | 30.1% | 1.8% |
| Net Income Margin | 3.2% | 11.9% | 24.5% | 16.4% | 18.0% | 1.5% |
| SG&A, % of revenue | | 36.1% | 30.8% | 29.3% | 28.8% | -0.5% |
| CAPEX, % of revenue | 1.7% | 1.8% | 2.1% | 5.9% | 5.6% | -0.3% |
| ROIC | 6.0% | 34.1% | 51.7% | 54.3% | 51.7% | -2.6% |
| ROE | 5.2% | 24.5% | 53.2% | 33.5% | 33.0% | -0.5% |
| Net Debt/EBITDA | 0.5x | -0.3x | -0.4x | -0.6x | -0.8x | -0.2x |
Revenue and profitability
The company's Revenue jumped on 13.0% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 6.1 pp from -3.9% to 2.2% in 2016.
Gross Margin increased slightly on 1.0 pp from 55.8% to 56.8% in FY2016. SG&A as a % of Revenue decreased slightly on 0.51 pp from 29.3% to 28.8% in FY2016.
Net Income marign increased slightly on 1.5 pp from 16.4% to 18.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 5.6%. The company showed CAPEX/Revenue growth of 3.8 pp from 1.8% in FY2013 to 5.6% in FY2016. It's average CAPEX/Revenue for the last three years was 4.5%.
Return on investment
The company operates at high and attractive ROIC (51.70%) and ROE (33.01%). ROIC decreased on 2.6 pp from 54.3% to 51.7% in FY2016. ROE showed almost no change in FY2016.
Leverage (Debt)
Debt level is -0.8x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from -0.6x to -0.8x in FY2016. Debt decreased on 8.0% in FY2016 while cash jumped on 54.8% in FY2016.
Appendix 1: Peers in Industrial Engineering
Below you can find Somero Enterprise Inc benchmarking vs. other companies in Industrial Engineering 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 |
|---|
| Slingsby(H.C.) ($SLNG) | -4.2% | -4.3% | -9.9% | 35.5% | |
| Mincon Group ($MCON) | 53.5% | -17.1% | 4.2% | 28.8% | |
| Ab Dynamics ($ABDP) | | 36.8% | 13.8% | 19.3% | 23.9% |
| Flowtech Fluidpower ($FLO) | -5.8% | -5.1% | 17.7% | 18.7% | |
| Hydro International ($HYD) | 11.7% | -7.2% | -0.1% | 17.7% | |
| |
|---|
| Median (23 companies) | 11.7% | 2.9% | -0.0% | 0.3% | -2.2% |
|---|
| Somero Enterprise Inc ($SOMA) | | 40.1% | 31.5% | 18.5% | 13.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hydro International ($HYD) | 37.3% | 39.4% | 45.3% | 46.4% | |
| Rotork ($76ID) | 46.8% | 47.4% | 48.0% | 45.7% | 44.3% |
| Northbridge Industrial Services ($NBI) | 57.0% | 54.0% | 48.4% | 43.4% | |
| Amiad Water Systems Ltd ($AFS) | 42.8% | 40.8% | 38.9% | 40.5% | |
| Mincon Group ($MCON) | 42.6% | 49.1% | 43.2% | 40.2% | |
| |
|---|
| Median (21 companies) | 31.0% | 29.9% | 30.2% | 32.9% | 28.5% |
|---|
| Somero Enterprise Inc ($SOMA) | 48.7% | 52.2% | 54.0% | 55.8% | 56.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Northbridge Industrial Services ($NBI) | 30.3% | 29.2% | 32.4% | 32.5% | |
| Rotork ($76ID) | 27.0% | 27.6% | 28.0% | 25.0% | 22.8% |
| Ab Dynamics ($ABDP) | 21.3% | 18.9% | 20.1% | 24.0% | 22.7% |
| Mincon Group ($MCON) | 22.9% | 30.0% | 22.7% | 17.6% | |
| Hms Hydraulic Mach & Sys Grp ($HMSG) | 16.5% | 17.0% | 7.5% | 16.0% | |
| |
|---|
| Median (23 companies) | 8.6% | 8.0% | 7.4% | 7.9% | 8.0% |
|---|
| Somero Enterprise Inc ($SOMA) | 12.6% | 23.9% | 27.4% | 28.2% | 30.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pressure Technologies ($PRES) | 2.4% | 2.3% | 3.3% | 11.6% | 2.5% |
| Mitsubishi Electric Corp ($MEL) | 4.4% | 4.2% | 3.7% | 4.6% | 4.1% |
| Ab Dynamics ($ABDP) | 2.2% | 5.6% | 2.5% | 4.2% | 7.9% |
| Braime(T.F.& J.H.)(Hldgs) ($BMTO) | 2.3% | 9.6% | 5.6% | 3.8% | |
| Hms Hydraulic Mach & Sys Grp ($HMSG) | 4.4% | 4.5% | 3.6% | 3.7% | |
| |
|---|
| Median (23 companies) | 2.4% | 2.3% | 2.4% | 2.2% | 4.1% |
|---|
| Somero Enterprise Inc ($SOMA) | 1.7% | 1.8% | 2.1% | 5.9% | 5.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Energy Technique ($ETQ) | 18.9% | 19.3% | 47.5% | 41.6% | |
| Renold ($RNO) | 18.8% | -12.7% | -2.5% | 41.3% | 39.1% |
| Ab Dynamics ($ABDP) | 44.4% | 34.3% | 28.4% | 31.4% | 28.0% |
| Rotork ($76ID) | 50.0% | 45.4% | 38.1% | 21.9% | 17.0% |
| Hms Hydraulic Mach & Sys Grp ($HMSG) | 17.5% | 14.7% | 3.2% | 14.7% | |
| |
|---|
| Median (23 companies) | 14.2% | 11.4% | 10.8% | 8.8% | 1.6% |
|---|
| Somero Enterprise Inc ($SOMA) | 6.0% | 34.1% | 51.7% | 54.3% | 51.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tricorn Group ($TCN) | -0.3x | 0.9x | 5.8x | 4.0x | 7.2x |
| Slingsby(H.C.) ($SLNG) | -3.3x | -4.6x | -3.7x | 3.7x | |
| Avingtrans ($AVG) | 3.1x | 0.7x | 1.2x | 3.6x | -22.4x |
| 600 Group ($SIXH) | | 3.2x | 2.2x | 3.1x | |
| Chamberlin ($CMH) | 0.5x | 0.4x | | 2.2x | 2.2x |
| |
|---|
| Median (23 companies) | 0.1x | 0.6x | 0.6x | 1.1x | 0.0x |
|---|
| Somero Enterprise Inc ($SOMA) | 0.5x | -0.3x | -0.4x | -0.6x | -0.8x |
