SMART Technologies Inc reports 16.3% revenue decline in FY2015 and almost no change in EBITDA Margin of 17.1%
14.05.2015 • About SMART Technologies Inc (
$SMA) • By InTwits
SMART Technologies Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- SMART Technologies Inc is a company in decline: FY2015 revenue growth was -16.3%, 5 years revenue CAGR was -5.3%
- EBITDA Margin is quite volatile: 17.1% in FY2015, 17.0% in FY2014, -2.0% in FY2013, 12.8% in FY2012, 20.4% in FY2011
- SMART Technologies Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's a lot of higher than industry average of 1.8%.
- CAPEX is quite volatile: 6.7 in FY2015, 11.4 in FY2014, 19.3 in FY2013, 23.1 in FY2012, 27.5 in FY2011
- The company has highly profitable business model: ROIC is at 43.8%
- It operates with high leverage: Net Debt/EBITDA is 1.3x while industry average is -2.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
SMART Technologies Inc ($SMA) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 790.1 | 745.8 | 589.4 | 589.2 | 492.9 | -16.3% |
| Gross Profit | 390.9 | 335.6 | 261.6 | 249.1 | 231.9 | -6.9% |
| SG&A | 180.8 | 180.8 | 170.9 | 116.7 | 103.6 | -11.2% |
| EBITDA | 161.2 | 95.2 | -11.5 | 100.0 | 84.1 | -15.9% |
| Net Income | 69.4 | 31.0 | -54.5 | 20.5 | 24.1 | 17.4% |
Balance Sheet
|
|---|
| Cash | 119.0 | 95.5 | 141.4 | 58.1 | 54.5 | -6.3% |
| Short Term Debt | 3.1 | 3.1 | 3.1 | 10.6 | 11.3 | 6.6% |
| Long Term Debt | 336.3 | 288.2 | 285.2 | 167.9 | 150.2 | -10.6% |
Cash flow
|
|---|
| Capex | 27.5 | 23.1 | 19.3 | 11.4 | 6.7 | -41.2% |
Ratios
|
|---|
| Revenue growth | 21.9% | -5.6% | -21.0% | -0.0% | -16.3% | |
| EBITDA growth | 6.6% | -41.0% | -112.1% | -970.0% | -15.9% | |
| Gross Margin | 49.5% | 45.0% | 44.4% | 42.3% | 47.0% | 4.8% |
| EBITDA Margin | 20.4% | 12.8% | -2.0% | 17.0% | 17.1% | 0.1% |
| Net Income Margin | 8.8% | 4.2% | -9.2% | 3.5% | 4.9% | 1.4% |
| SG&A, % of revenue | 22.9% | 24.2% | 29.0% | 19.8% | 21.0% | 1.2% |
| CAPEX, % of revenue | 3.5% | 3.1% | 3.3% | 1.9% | 1.4% | -0.6% |
| ROIC | 43.2% | 21.4% | -18.9% | 28.1% | 43.8% | 15.7% |
| Net Debt/EBITDA | 1.4x | 2.1x | | 1.2x | 1.3x | 0.1x |
Revenue and profitability
SMART Technologies Inc's Revenue dropped on 16.3% in FY2015. EBITDA Margin showed almost no change in FY2015.
Gross Margin increased on 4.8 pp from 42.3% to 47.0% in FY2015. SG&A as a % of Revenue increased slightly on 1.2 pp from 19.8% to 21.0% in FY2015.
Net Income marign increased slightly on 1.4 pp from 3.5% to 4.9% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 SMART Technologies Inc had CAPEX/Revenue of 1.4%. CAPEX/Revenue decreased slightly on 1.7 pp from 3.1% in FY2012 to 1.4% in FY2015. It's average CAPEX/Revenue for the last three years was 2.2%.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.3x and Debt / EBITDA is 1.9x. Net Debt / EBITDA increased on 0.1x from 1.2x to 1.3x in FY2015. Debt decreased on 9.5% in FY2015 while cash decreased on 6.3% in FY2015.
Appendix 1: Peers in Technology
Below we provide SMART Technologies Inc benchmarking against other companies in Technology industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mitel Networks Corp ($MNW) | -9.0% | 3.8% | -5.7% | 91.4% | |
| Redknee Solutions Inc ($RKN) | 25.9% | -4.5% | 151.6% | 81.4% | |
| Intrinsyc Technologies Corp ($ITC) | -19.0% | -26.8% | -21.7% | 70.8% | |
| Espial Group Inc ($ESP) | 10.2% | -9.5% | -5.5% | 59.4% | |
| iLOOKABOUT Corp ($ILA) | -7.6% | 19.6% | 8.9% | 58.8% | |
| |
|---|
| Median (33 companies) | 11.8% | 6.6% | 12.4% | 15.2% | -19.1% |
|---|
| SMART Technologies Inc ($SMA) | | -5.6% | -21.0% | -0.0% | -16.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ProntoForms Corp ($PFM) | 90.1% | 96.1% | 98.1% | 98.0% | |
| Constellation Software Inc/Canada ($CSU) | 85.5% | 86.2% | 85.5% | 86.1% | |
| Symbility Solutions Inc ($SY) | 82.1% | 80.6% | 79.9% | 81.0% | |
| Espial Group Inc ($ESP) | 77.9% | 77.5% | 81.7% | 78.5% | |
| Absolute Software Corp ($ABT) | 71.6% | 73.6% | 76.3% | 78.4% | |
| |
|---|
| Median (31 companies) | 50.9% | 59.2% | 53.2% | 52.2% | 58.0% |
|---|
| SMART Technologies Inc ($SMA) | 49.5% | 45.0% | 44.4% | 42.3% | 47.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi-LAN Inc ($WIN) | 26.5% | 40.9% | 12.2% | 56.2% | |
| Computer Modelling Group Ltd ($CMG) | 51.5% | 53.8% | 52.2% | 51.5% | |
| Open Text Corp ($OTC) | 27.1% | 26.5% | 29.1% | 30.0% | |
| Sandvine Corp ($SVC) | 5.1% | 0.9% | 24.0% | 28.2% | |
| Enghouse Systems Ltd ($ESL) | 24.8% | 25.4% | 23.6% | 24.7% | |
| |
|---|
| Median (33 companies) | 8.5% | 8.3% | 6.2% | 7.0% | 18.0% |
|---|
| SMART Technologies Inc ($SMA) | 20.4% | 12.8% | -2.0% | 17.0% | 17.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Halogen Software Inc ($HGN) | | 4.9% | 9.0% | 8.4% | |
| Intermap Technologies Corp ($IMP) | 0.4% | 1.0% | 3.2% | 7.4% | |
| Kinaxis Inc ($KXS) | 2.2% | 2.9% | 2.3% | 5.0% | |
| BlackBerry Ltd ($BB) | 5.2% | 4.9% | 3.8% | 4.2% | 2.6% |
| ProntoForms Corp ($PFM) | 1.3% | 1.1% | 0.8% | 3.6% | |
| |
|---|
| Median (33 companies) | 1.3% | 1.5% | 1.4% | 1.2% | 2.1% |
|---|
| SMART Technologies Inc ($SMA) | 3.5% | 3.1% | 3.3% | 1.9% | 1.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kinaxis Inc ($KXS) | | | 61.8% | 63.6% | |
| Computer Modelling Group Ltd ($CMG) | 75.5% | 74.2% | 68.6% | 62.9% | |
| Constellation Software Inc/Canada ($CSU) | 45.8% | 45.9% | 22.4% | 24.7% | |
| Sandvine Corp ($SVC) | -1.7% | -4.9% | 16.9% | 20.2% | |
| CGI Group Inc ($GIB.A) | 14.7% | 5.7% | 10.9% | 17.1% | |
| |
|---|
| Median (33 companies) | 4.7% | 2.9% | -4.3% | 0.5% | -0.7% |
|---|
| SMART Technologies Inc ($SMA) | 43.2% | 21.4% | -18.9% | 28.1% | 43.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Data Group Ltd ($DGI) | 3.2x | 3.5x | 3.7x | 4.0x | |
| Critical Control Energy Services Corp ($CCZ) | 1.9x | | 1.4x | 2.7x | |
| Mitel Networks Corp ($MNW) | 4.9x | 3.7x | 3.8x | 2.6x | |
| Open Text Corp ($OTC) | 0.0x | 0.1x | 0.2x | 1.8x | |
| CGI Group Inc ($GIB.A) | 1.3x | 6.0x | 2.4x | 1.3x | |
| |
|---|
| Median (21 companies) | -0.5x | -0.4x | -0.4x | -1.3x | -0.4x |
|---|
| SMART Technologies Inc ($SMA) | 1.4x | 2.1x | | 1.2x | 1.3x |
