Healthier Choices Management Corp revenue decreased on 7.9% while EBITDA Margin increased on 4.2 pp from -21.6% to -17.4%
03/05/2021 • About Healthier Choices Management Corp (
$HCMC) • By InTwits
Healthier Choices Management Corp reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -17.4%
- Healthier Choices Management Corp motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 was 0.0% while average EBITDA Margin was -39.7% for the sames years
- Healthier Choices Management Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has unprofitable business model: ROIC is -27.3%
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 decreased on 7.9%. Annual revenue decline showed slowdown in 20Q4 - revenue decreased on 7.7%. Revenue decline was accelerating on average at -23.7 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.2 pp from -21.6% to -17.4% in 2020. EBITDA Margin grew at 18.1 pp per annum in 2016-2020.
Gross Margin decreased slightly on 1.4 pp from 42.9% to 41.5% in 2020. Gross Margin followed a declining trend at -2.2 pp per annum in 2016-2020. SG&A as a % of Revenue decreased on 5.4 pp from 68.9% to 63.5% in 2020. During the last 5 years SG&A as a % of Revenue topped in 2017 at 128% and was declining since that time.
Net Income margin decreased on 8.2 pp from -18.5% to -26.7% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 Healthier Choices Management Corp had CAPEX/Revenue of 0.18%. CAPEX/Revenue decreased slightly on 0.93 pp from 1.1% in 2017 to 0.18% in 2020. It's average CAPEX/Revenue for the last three years was 0.30%. During 2016-2020 CAPEX as a % of Revenue topped in 2017 at 1.1% and was declining since that time.
Leverage (Debt)
Debt level is -3.9x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2020. Debt jumped on 17.4% while cash dropped on 73.7%.
Healthier Choices Management Corp has short term refinancing risk: cash is only 20.4% of short term debt.
Financial and operational results
FY ended 12/31/2020
Healthier Choices Management Corp ($HCMC) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 10.565 | 12.948 | 14.647 | 15.114 | 13.921 | -7.9% |
| Gross Profit | 5.233 | 6.266 | 7.165 | 6.484 | 5.777 | -10.9% |
| SG&A | 9.793 | 16.556 | 10.147 | 10.417 | 8.845 | -15.1% |
| EBITDA | -8.488 | -9.939 | -2.606 | -3.258 | -2.418 | |
| Net Income | 10.685 | -9.875 | -13.163 | -2.799 | -3.722 | |
Balance Sheet
|
|---|
| Cash | 13.366 | 7.883 | 7.061 | 3.525 | 0.925 | -73.7% |
| Short Term Debt | 0.053 | 0.002 | 2.151 | 2.838 | 4.547 | 60.2% |
| Long Term Debt | 0.000 | 0.010 | 1.128 | 4.414 | 3.964 | -10.2% |
Cash flow
|
|---|
| Capex | 0.025 | 0.143 | 0.075 | 0.033 | 0.025 | -25.0% |
Ratios
|
|---|
| Revenue growth | 101.1% | 22.6% | 13.1% | 3.2% | -7.9% | |
| EBITDA growth | -61.6% | 17.1% | -73.8% | 25.0% | -25.8% | |
|
|---|
| Gross Margin | 49.5% | 48.4% | 48.9% | 42.9% | 41.5% | -1.4% |
| EBITDA Margin | -80.3% | -76.8% | -17.8% | -21.6% | -17.4% | 4.2% |
| SG&A, % of revenue | 92.7% | 127.9% | 69.3% | 68.9% | 63.5% | -5.4% |
| Net Income Margin | 101.1% | -76.3% | -89.9% | -18.5% | -26.7% | -8.2% |
| CAPEX, % of revenue | 0.2% | 1.1% | 0.5% | 0.2% | 0.2% | -0.0% |
|
|---|
| ROIC | | -681.5% | -48.9% | -33.6% | -27.3% | 6.3% |
| ROE | | -680.6% | | | | |
Healthier Choices Management Corp ($HCMC) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 4 | 3 | 3 | 3 | | -7.9% | -13.3% | -2.1% | -7.7% |
| EBITDA | -1 | -1 | -1 | -1 | | - | - | - | - |
| Net Income | -1 | -1 | -1 | -1 | | - | - | - | -347.8% |
Balance Sheet
|
|---|
| Cash | 3 | 1 | 1 | 1 | | -47.2% | -77.3% | -85.8% | -73.7% |
| Short Term Debt | 3 | 3 | 6 | 5 | | 5.7% | 14.8% | 114.0% | 60.2% |
| Long Term Debt | 4 | 5 | 4 | 4 | | -11.5% | -0.1% | -5.1% | -10.2% |
Ratios
|
|---|
| Gross Margin | 42.3% | 41.5% | 40.7% | 41.3% | | -1.1% | -2.0% | -0.4% | -2.0% |
| EBITDA Margin | -12.8% | -19.8% | -32.2% | -20.1% | | 5.6% | -16.2% | -15.5% | 16.6% |
| Net Income Margin | -17.1% | -24.7% | -38.9% | -28.2% | | 8.3% | -1.1% | -5.2% | -38.7% |
Peers in Tobacco
Below you can find Healthier Choices Management Corp benchmarking vs. other companies in Tobacco 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 |
|---|
| Altria Group ($MO) | - | 0.8% | 0.7% | 0.9% | 5.3% |
| |
|---|
| Median (1 company) | - | 0.8% | 0.7% | 0.9% | 5.3% |
|---|
| Healthier Choices Management Corp ($HCMC) | - | 22.6% | 13.1% | 3.2% | -7.9% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Altria Group ($MO) | 59.9% | 61.4% | 62.4% | 64.2% | 62.5% |
| |
|---|
| Median (1 company) | 59.9% | 61.4% | 62.4% | 64.2% | 62.5% |
|---|
| Healthier Choices Management Corp ($HCMC) | 49.5% | 48.4% | 48.9% | 42.9% | 41.5% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Altria Group ($MO) | 46.4% | 50.3% | 47.6% | 53.3% | 53.4% |
| |
|---|
| Median (1 company) | 46.4% | 50.3% | 47.6% | 53.3% | 53.4% |
|---|
| Healthier Choices Management Corp ($HCMC) | -80.3% | -76.8% | -17.8% | -21.6% | -17.4% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Altria Group ($MO) | 1.0% | 1.0% | 1.2% | 1.2% | 1.1% |
| |
|---|
| Median (1 company) | 1.0% | 1.0% | 1.2% | 1.2% | 1.1% |
|---|
| Healthier Choices Management Corp ($HCMC) | 0.2% | 1.1% | 0.5% | 0.2% | 0.2% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Altria Group ($MO) | 32.0% | 27.8% | 22.8% | 24.3% | 28.5% |
| |
|---|
| Median (1 company) | 32.0% | 27.8% | 22.8% | 24.3% | 28.5% |
|---|
| Healthier Choices Management Corp ($HCMC) | - | -681.5% | -48.9% | -33.6% | -27.3% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Altria Group ($MO) | 1.0x | 1.3x | 2.6x | 2.5x | 2.2x |
| |
|---|
| Median (1 company) | 1.0x | 1.3x | 2.6x | 2.5x | 2.2x |
|---|
