Denison Mines Corp. Earnings Analysis: Q3, 2015 By the Numbers

Denison Mines Corp. reports financial results for the quarter ended September 30, 2015.

Denison Mines Corp. has an earnings momentum score of 48.52 and has a relative valuation rating of NEUTRAL.

Earnings Momentum Score

Highlights

  • Summary numbers: Revenues of USD 3.53 million, Net Earnings of USD -21.43 million, and Earnings per Share (EPS) of USD -0.04.
  • Gross margins widened from -147.85% to -93.73% compared to the same period last year, operating (EBITDA) margins now -135.08% from -190.94%.
  • Year-on-year change in operating cash flow of -7.01% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings declined although operating margins improved from -212.46% to -163.47%.
  • Cash and Cash equivalents were down this period to 14.59 compared to 31.02 in the same period last year. Debt to Equity this period is 6.67E-5 compared to last period.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2014-09-30 2014-12-31 2015-03-31 2015-06-30 2015-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 2.35 2.74 2.33 2.93 3.53
Revenue Growth (%YOY) -16.07 13.39 7.08 24.22 49.98
Earnings (mil) -2.82 -4.65 -9.79 -4.13 -21.43
Earnings Growth (%YOY) 93.8 84.73 22.68 64.25 -660
Net Margin (%) -119.95 -170.03 -420.7 -141.14 -607.83
EPS -0.01 -0.01 -0.02 -0.01 -0.04
Return on Equity (%) -4.14 -7.08 -16.17 -7.12 -38.42
Return on Assets (%) -3.48 -5.69 -12.81 -5.85 -31.49

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DNN-US‘s change in revenue this period compared to the same period last year of 49.98% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that DNN-US is holding onto its market share. Also, for comparison purposes, revenues changed by 20.38% and earnings by -418.43% compared to the immediate last period.

Revenues History
Earnings History

Despite an overall improvement in operating (EBIT) margins, the company’s earnings fell. EBIT margins went from -212.46% to -163.47%. The decline in earnings appears to be largely because of one-time items. Pretax margins declined from -150.32% to -623.60%.

EBIT Margin History
Cash & ST Investments

DNN-US‘s change in operating cash flow of -7.01% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Access our Ratings and Scores for Denison Mines Corp.


Company Profile

Denison Mines Corp. is engaged in uranium mining and related activities, including acquisition, exploration and development of uranium bearing properties, extraction, processing and selling of uranium. The company holds interest in the McClean Lake mill located in the Athabasca Basin of Saskatchewan, Canada and varying ownership interests in a number of development and exploration projects located in Canada, Mongolia and Zambia. Denison Mines was founded on May 9, 1997 and is headquartered in Toronto, Canada.

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