Griffin Industrial Realty, Inc. :GRIF-US: Earnings Analysis: Q4, 2016 By the Numbers : February 17, 2017

Griffin Industrial Realty, Inc. reports financial results for the quarter ended November 30, 2016.

Highlights

  • Summary numbers: Revenues of USD 10.38 million, Net Earnings of USD 1.34 million.
  • Gross margins widened from 43.87% to 51.98% compared to the same period last year, operating (EBITDA) margins now 43.27% from 37.18%.
  • Change in operating cash flow of 20.45% compared to same period last year is about the same as change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth from operating margin improvements as well as one-time items.

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):

2016-11-30 2016-08-31 2016-05-31 2016-02-29 2015-11-30
Relevant Numbers (Quarterly)
Revenues (mil) 10.38 7.27 6.52 6.68 7.48
Revenue Growth (%YOY) 38.86 -11.23 5.29 7.2 -3.17
Earnings (mil) 1.34 -0.05 -0.38 -0.34 0.16
Earnings Growth (%YOY) 716.46 -104.07 -61.97 52.68 -39.93
Net Margin (%) 12.9 -0.67 -5.81 -5.01 2.19
EPS 0.26 -0.01 -0.07 -0.07 0.03
Return on Equity (%) 5.91 -0.22 -1.64 -1.42 0.68
Return on Assets (%) 2.44 -0.09 -0.7 -0.63 0.32

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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 42.88% and earnings by 2,832.65% compared to the previous period.

Earnings Growth Analysis

The company’s earnings growth was influenced by year-on-year improvement in gross margins from 43.87% to 51.98% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from 37.18% to 43.27% compared to the same period last year. For comparison, gross margins were 39.42% and EBITDA margins were 34.43% in the last reporting 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 20.45% 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 earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from 9.87% to 21.52% and (2) one-time items. The company’s pretax margins are now 21.96% compared to 5.86% for the same period last year.

EBIT Margin History
PreTax Margin History

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Company Profile

Griffin Industrial Realty, Inc. engages in the ownership, operation, and development of real estate properties. Its property portfolio includes industrial properties, warehouses, offices, land, flex properties, restaurant, and distribution centers. The company was founded in 1970 and is headquartered in New York, NY.

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