National Waste Management Holdings, Inc. :NWMH-US: Earnings Analysis: Q4, 2015 By the Numbers

National Waste Management Holdings, Inc. reports financial results for the quarter ended December 31, 2015.

Highlights

  • Summary numbers: Revenues of USD 1.15 million, Net Earnings of USD -0.25 million.
  • Gross margins narrowed from 44.72% to 42.82% compared to the same period last year, operating (EBITDA) margins now 7.13% from 15.86%.
  • Change in operating cash flow of 4,903.49% 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 growth:

2014-12-31 2015-03-31 2015-06-30 2015-09-30 2015-12-31
Relevant Numbers (Quarterly)
Revenues (mil) 0.43 0.39 0.48 0.48 1.15
Revenue Growth (%YOY) 0 0 12.94 13.5 169.46
Earnings (mil) -0.05 0.04 0.06 0.08 -0.25
Earnings Growth (%YOY) -1144.64 1828.56 -41.21 33.07 -409.42
Net Margin (%) -11.37 9.82 13.5 17.04 -21.5
EPS -0 0 0 0 -0
Return on Equity (%) N/A N/A 268.66 91.99 -33.62
Return on Assets (%) -14.99 11.04 16.18 17.43 -16.47

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Market Share Versus Profits

Revenues History
Earnings History

Compared to the same period last year, NWMH-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 NWMH-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 139.74% and earnings by -402.47% 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 44.72% to 42.82%, as well as issues with cost controls. As a result, operating margins (EBITDA margins) went from 15.86% to 7.13% in this time frame. For comparison, gross margins were 54.95% and EBITDA margins were 32.92% in the previous period.

Cash Versus Earnings – Sustainable Performance?

NWMH-US‘s year-on-year change in operating cash flow of 4,903.49% 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 8.56% to -5.84% and (2) one-time items that contributed to a decrease in pretax margins from 7.59% to -32.48%

EBIT Margin History
PreTax Margin History

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Company Profile

National Waste Management Holdings, Inc. provides waste management services. It offers landfill services and provides roll-off containers. The company’s landfill services include construction and debris landfill, clean-up and hauling, land clearing and yard trash debris and recycling and roll-off dumpster services provides dumpsters for lease for construction sites and special events. National Waste Management Holdings was founded on February 23, 2010 and is headquartered in Hernando, FL.

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