Griffin Industrial Realty, Inc. :GRIF-US: Earnings Analysis: Q1, 2017 By the Numbers : April 13, 2017

Griffin Industrial Realty, Inc. reports financial results for the quarter ended February 28, 2017.

Highlights

  • Summary numbers: Revenues of USD 6.98 million, Net Earnings of USD -0.94 million.
  • Gross margins narrowed from 35.48% to 30.72% compared to the same period last year, operating (EBITDA) margins now 18.48% from 32.86%.
  • Change in operating cash flow of -40.86% compared to same period last year is about the same as change in earnings, likely no significant movement in accruals or reserves.
  • Narrowing of operating margins contributed to decline in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2017-02-28 2016-11-30 2016-08-31 2016-05-31 2016-02-29
Relevant Numbers (Quarterly)
Revenues (mil) 6.98 10.38 7.27 6.52 6.68
Revenue Growth (%YOY) 4.44 38.86 -11.23 5.29 7.2
Earnings (mil) -0.94 1.34 -0.05 -0.38 -0.34
Earnings Growth (%YOY) -180.3 716.46 -104.07 -61.97 52.68
Net Margin (%) -13.45 12.9 -0.67 -5.81 -5.01
EPS -0.19 0.26 -0.01 -0.07 -0.07
Return on Equity (%) -4.18 5.91 -0.22 -1.64 -1.42
Return on Assets (%) -1.69 2.44 -0.09 -0.7 -0.63

Access our Ratings and Scores for Griffin Industrial Realty, Inc.

Market Share Versus Profits

Revenues History
Earnings History

Compared to the same period last year, GRIF-US‘s change in revenue was close to the amount of its change in earnings. It remains to be seen how the rest of its peer group’s results will turn out and if GRIF-US‘s performance is a sign of any major shift in the composition of market share in this sector. Also, for comparison purposes, revenues changed by -32.76% and earnings by -170.13% compared to the previous period.

Earnings Growth Analysis

The company’s year-on-year decline in earnings was influenced by a weakening in gross margins from 35.48% to 30.72%, as well as issues with cost controls. As a result, operating margins (EBITDA margins) went from 32.86% to 18.48% in this time frame. For comparison, gross margins were 51.98% and EBITDA margins were 43.27% in the previous period.

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

GRIF-US‘s year-on-year change in operating cash flow of -40.86% is around its change in earnings. This suggests that there are likely no significant movement in accruals or reserves for managing earnings this period.

Margins

The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from 0.76% to -15.19% and (2) one-time items that contributed to a decrease in pretax margins from -4.19% to -19.92%

EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for Griffin Industrial Realty, Inc.

Company Profile

Griffin Industrial Realty, Inc. engages in the development, management, and leasing of industrial and warehouse properties, and to a lesser extent, office and flex properties. The company was founded in 1970 and is headquartered in New York, NY.

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