EnviroStarm, Inc. Debt dropped on 18.5% and EBITDA dropped on 13.7%
09/14/2020 • About EnviroStarm, Inc. (
$EVI) • By InTwits
EnviroStarm, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EnviroStarm, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.7%.
- The company has potentially unprofitable business model: ROIC is 2.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
EnviroStarm, Inc.'s Revenue increased on 3.3%. Revenue growth showed slowdown in FY20Q4 - it was -16.0% YoY. During FY2016-FY2020 Revenue growth topped in FY2017 at 161% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 23.2 pp from 55.3% to 32.1% in FY2020. EBITDA Margin declined at -1.1 pp per annum in the last 5 years.
Gross Margin showed almost no change in FY2020. SG&A as a % of Revenue increased on 2.2 pp from 20.0% to 22.2% in FY2020. SG&A as a % of Revenue stuck to a growing trend at 1.8 pp per annum in FY2016-FY2020.
Net Income margin decreased slightly on 1.3 pp from 1.6% to 0.33% in FY2020. Net Income margin followed a declining trend at -1.1 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 1.4%. The company's CAPEX/Revenue increased slightly on 1.2 pp from 0.25% in FY2017 to 1.4% in FY2020. Average CAPEX/Revenue for the last three years was 1.1%. CAPEX as a % of Revenue stuck to a growing trend at 0.39 pp per annum in FY2016-FY2020.
Return on investment
The company operates at low ROIC (2.4%) and ROE (0.9%). ROIC decreased on 4.9 pp from 7.4% to 2.4% in FY2020. ROE decreased on 4.5 pp from 5.4% to 0.92% in FY2020. ROIC followed a declining trend at -12.3 pp per annum in the last 5 years. ROE followed a declining trend at -7.9 pp per annum in FY2016-FY2020.
Leverage (Debt)
Debt level is 2.8x Net Debt / EBITDA and 3.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.9x from 3.6x to 2.8x in FY2020. Debt dropped on 18.5% while cash jumped on 94.3%. Net Debt/EBITDA followed a growing trend at 1.1x per annum in the last 5 years.
EnviroStarm, Inc. has no short term refinancing risk: cash is higher than short term debt (224.9%).
Valuation and dividends
The company's trades at EV/EBITDA 35.5x and P/E 355.1x.
Management team
Henry M Nahmad is a the company's CEO. Henry M Nahmad has spent 6 years with the company. EnviroStarm, Inc.'s CFO is Robert H Lazar. Robert H Lazar has 2 years tenure at the company.
Financial and operational results
FY ended 06/30/2020
EnviroStarm, Inc. ($EVI) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 36.0 | 94.0 | 150.0 | 228.3 | 235.8 | 3.3% |
| Gross Profit | 8.2 | 20.3 | 36.5 | 52.7 | 55.2 | 4.8% |
| SG&A | 5.4 | 15.0 | 29.6 | 45.7 | 52.4 | 14.7% |
| EBITDA | 2.9 | 5.9 | 8.5 | 9.7 | 8.4 | -13.7% |
| Net Income | 1.7 | 3.2 | 4.0 | 3.7 | 0.8 | -79.3% |
Balance Sheet
|
|---|
| Cash | 3.9 | 0.7 | 1.3 | 5.0 | 9.8 | 94.3% |
| Short Term Debt | 0.0 | 0.7 | 1.2 | 0.0 | 4.4 | |
| Long Term Debt | 0.0 | 3.7 | 8.8 | 40.6 | 28.7 | -29.3% |
Cash flow
|
|---|
| Capex | 0.0 | 0.2 | 0.8 | 3.0 | 3.4 | 13.3% |
Ratios
|
|---|
| Revenue growth | 17.1% | 160.9% | 59.6% | 52.2% | 3.3% | |
| EBITDA growth | 4.2% | 107.8% | 43.7% | 14.5% | -13.7% | |
|
|---|
| Gross Margin | 22.8% | 21.6% | 24.3% | 23.1% | 23.4% | 0.3% |
| EBITDA Margin | 7.9% | 6.3% | 5.7% | 4.3% | 3.6% | -0.7% |
| SG&A, % of revenue | 15.1% | 15.9% | 19.7% | 20.0% | 22.2% | 2.2% |
| Net Income Margin | 4.8% | 3.4% | 2.6% | 1.6% | 0.3% | -1.3% |
| CAPEX, % of revenue | 0.0% | 0.3% | 0.6% | 1.3% | 1.4% | 0.1% |
|
|---|
| ROIC | 55.1% | 25.4% | 13.3% | 7.4% | 2.4% | -4.9% |
| ROE | 35.4% | 15.6% | 8.2% | 5.4% | 0.9% | -4.5% |
| Net Debt/EBITDA | -1.4x | 0.6x | 1.0x | 3.6x | 2.8x | -0.9x |
EnviroStarm, Inc. ($EVI) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 56 | 67 | 59 | 54 | | 28.4% | 9.6% | -0.4% | -16.0% |
| EBITDA | 3 | 2 | 2 | 2 | | 28.6% | -22.3% | 4.2% | -41.8% |
| Net Income | 1 | 0 | -0 | -0 | | -27.1% | -79.2% | -102.6% | -104.6% |
Balance Sheet
|
|---|
| Cash | 5 | 6 | 4 | 10 | | 180.3% | -41.8% | -41.8% | 94.3% |
| Short Term Debt | 2 | 2 | 2 | 4 | | 41.3% | - | - | - |
| Long Term Debt | 45 | 39 | 34 | 29 | | 122.1% | 3.7% | -18.5% | -29.3% |
Ratios
|
|---|
| Gross Margin | 24.8% | 21.1% | 23.4% | 24.7% | | 2.4% | -1.4% | 0.8% | 0.3% |
| EBITDA Margin | 4.5% | 3.3% | 3.1% | 3.4% | | 0.0% | -1.4% | 0.1% | -1.5% |
| Net Income Margin | 1.0% | 0.4% | -0.0% | -0.1% | | -0.8% | -1.7% | -0.8% | -2.0% |
Peers in Trading Companies & Distributors
Below you can find EnviroStarm, Inc. benchmarking vs. other companies in Trading Companies & Distributors 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| General Finance Corporation ($GFN) | - | -3.1% | 25.4% | 8.9% | -5.7% |
| |
|---|
| Median (1 company) | - | -3.1% | 25.4% | 8.9% | -5.7% |
|---|
| EnviroStarm, Inc. ($EVI) | - | 160.9% | 59.6% | 52.2% | 3.3% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| General Finance Corporation ($GFN) | 54.3% | 73.1% | 72.1% | 73.1% | 73.9% |
| |
|---|
| Median (1 company) | 54.3% | 73.1% | 72.1% | 73.1% | 73.9% |
|---|
| EnviroStarm, Inc. ($EVI) | 22.8% | 21.6% | 24.3% | 23.1% | 23.4% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| General Finance Corporation ($GFN) | 18.5% | 21.4% | 24.2% | 27.4% | 21.4% |
| |
|---|
| Median (1 company) | 18.5% | 21.4% | 24.2% | 27.4% | 21.4% |
|---|
| EnviroStarm, Inc. ($EVI) | 7.9% | 6.3% | 5.7% | 4.3% | 3.6% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| General Finance Corporation ($GFN) | 1.5% | 1.3% | 1.4% | 1.9% | 2.4% |
| |
|---|
| Median (1 company) | 1.5% | 1.3% | 1.4% | 1.9% | 2.4% |
|---|
| EnviroStarm, Inc. ($EVI) | 0.0% | 0.3% | 0.6% | 1.3% | 1.4% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| General Finance Corporation ($GFN) | 2.4% | 3.2% | 7.5% | 10.5% | 6.7% |
| |
|---|
| Median (1 company) | 2.4% | 3.2% | 7.5% | 10.5% | 6.7% |
|---|
| EnviroStarm, Inc. ($EVI) | 55.1% | 25.4% | 13.3% | 7.4% | 2.4% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| General Finance Corporation ($GFN) | 6.5x | 5.9x | 4.8x | 3.9x | 5.6x |
| |
|---|
| Median (1 company) | 6.5x | 5.9x | 4.8x | 3.9x | 5.6x |
|---|
| EnviroStarm, Inc. ($EVI) | -1.4x | 0.6x | 1.0x | 3.6x | 2.8x |
