SMART Technologies Inc reports 116% EBITDA decline and 29.3% Revenue decline
26.05.2016 • About SMART Technologies Inc (
$SMA) • By InTwits
SMART Technologies Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- SMART Technologies Inc is a company in decline: FY2016 revenue growth was -29.3%, 5 years revenue CAGR was -15.1%
- The company operates at negative EBITDA Margin: -4.0%
- EBITDA Margin is quite volatile: -4.0% in FY2016, 17.1% in FY2015, 17.0% in FY2014, -2.0% in FY2013, 12.8% in FY2012
- SMART Technologies Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's a lot of higher than industry average of 1.6%.
- CAPEX is quite volatile: 2.8 in FY2016, 6.7 in FY2015, 11.4 in FY2014, 19.3 in FY2013, 23.1 in FY2012
- The company has unprofitable business model: ROIC is at -20.4%
- It operates with high leverage: Net Debt/EBITDA is 0.5x while industry average is -4.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
SMART Technologies Inc ($SMA) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 745.8 | 589.4 | 589.2 | 492.9 | 348.5 | -29.3% |
| Gross Profit | 335.6 | 261.6 | 249.1 | 231.9 | 101.3 | -56.3% |
| SG&A | 180.8 | 170.9 | 116.7 | 103.6 | 78.1 | -24.6% |
| EBITDA | 95.2 | -11.5 | 100.0 | 84.1 | -13.8 | -116.4% |
| Net Income | 31.0 | -54.5 | 20.5 | 24.1 | -60.9 | -352.4% |
Balance Sheet
|
|---|
| Cash | 95.5 | 141.4 | 58.1 | 54.5 | 20.0 | -63.4% |
| Short Term Debt | 3.1 | 3.1 | 10.6 | 11.3 | 13.7 | 21.3% |
| Long Term Debt | 288.2 | 285.2 | 167.9 | 150.2 | 146.9 | -2.2% |
Cash flow
|
|---|
| Capex | 23.1 | 19.3 | 11.4 | 6.7 | 2.8 | -58.9% |
Ratios
|
|---|
| Revenue growth | -5.6% | -21.0% | -0.0% | -16.3% | -29.3% | |
| EBITDA growth | -41.0% | -112.1% | -970.0% | -15.9% | -116.4% | |
| Gross Margin | 45.0% | 44.4% | 42.3% | 47.0% | 29.1% | -18.0% |
| EBITDA Margin | 12.8% | -2.0% | 17.0% | 17.1% | -4.0% | -21.0% |
| Net Income Margin | 4.2% | -9.2% | 3.5% | 4.9% | -17.5% | -22.4% |
| SG&A, % of revenue | 24.2% | 29.0% | 19.8% | 21.0% | 22.4% | 1.4% |
| CAPEX, % of revenue | 3.1% | 3.3% | 1.9% | 1.4% | 0.8% | -0.6% |
| ROIC | 21.4% | -18.9% | 28.1% | 43.8% | -20.4% | -64.2% |
| Net Debt/EBITDA | 2.1x | | 1.2x | 1.3x | | -1.3x |
SMART Technologies Inc ($SMA) key quoterly financial indicators
| mln. | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 99 | 104 | 78 | 68 | -28.2% | -19.8% | -38.6% | -31.3% |
| EBITDA | 1 | 6 | -23 | 2 | -94.9% | -79.2% | -188.7% | -79.5% |
| Net Income | -2 | -9 | -49 | -0 | -118.2% | -173.6% | -630.6% | |
Balance Sheet
|
|---|
| Cash | 36 | 31 | 20 | 20 | -15.4% | -46.5% | -73.7% | -63.4% |
| Short Term Debt | 12 | 13 | 14 | 14 | 13.8% | 20.9% | 28.4% | 21.3% |
| Long Term Debt | 148 | 146 | 147 | 147 | -11.6% | -10.2% | -7.4% | -2.2% |
Ratios
|
|---|
| Gross Margin | 36.7% | 36.2% | 5.0% | 34.6% | -9.0% | -12.2% | -40.1% | -14.9% |
| EBITDA Margin | 1.1% | 5.7% | -29.0% | 2.6% | -14.6% | -16.3% | -49.1% | -6.1% |
| Net Income Margin | -2.2% | -8.7% | -63.6% | -0.3% | -11.1% | -18.2% | -71.0% | 9.4% |
Revenue and profitability
SMART Technologies Inc's Revenue dropped on 29.3%. Revenue decline showed acceleration in FY16Q4 - it was 31.3% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 59.9 pp from -28.4% to 31.5% in 2016.
Gross Margin dropped on 18.0 pp from 47.0% to 29.1% in FY2016. SG&A as a % of Revenue increased slightly on 1.4 pp from 21.0% to 22.4% in FY2016.
Net Income marign dropped on 22.4 pp from 4.9% to -17.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.79% in FY2016. SMART Technologies Inc showed decline in CAPEX/Revenue of 2.5 pp from 3.3% in FY2013 to 0.79% in FY2016. It's average CAPEX/Revenue for the last three years was 1.4%.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.5x and Debt / EBITDA is . Net Debt / EBITDA dropped on 1.3x from 1.3x to in FY2016. Debt decreased slightly on 0.53% while cash dropped on 63.4%.
Appendix 1: Peers in Technology
Below you can find SMART Technologies Inc benchmarking vs. other companies in Technology industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Intrinsyc Technologies Corp ($ITC) | | -21.7% | 70.8% | 24.5% | 39.2% |
| ProntoForms Corp ($PFM) | | 75.4% | 43.9% | 46.4% | 28.2% |
| Kinaxis Inc ($KXS) | | 30.3% | 15.2% | 30.3% | 27.0% |
| NexJ Systems Inc ($NXJ) | | 4.3% | -12.6% | 19.7% | 17.3% |
| Constellation Software Inc/Canada ($CSU) | | 35.9% | 37.9% | 10.1% | 15.6% |
| |
|---|
| Median (12 companies) | 3.6% | -1.0% | 11.5% | 10.1% | 12.7% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 86.2% | 85.5% | 86.1% | 86.2% | 87.1% |
| ProntoForms Corp ($PFM) | 96.1% | 98.1% | 98.0% | 79.4% | |
| Espial Group Inc ($ESP) | 77.5% | 81.7% | 78.5% | 74.3% | 74.7% |
| Halogen Software Inc ($HGN) | 72.0% | 74.8% | 71.8% | 73.8% | 76.2% |
| Kinaxis Inc ($KXS) | 71.8% | 70.4% | 70.4% | 71.8% | 69.1% |
| |
|---|
| Median (13 companies) | 62.8% | 47.3% | 53.5% | 53.0% | 71.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wi-LAN Inc ($WIN) | 40.9% | 12.2% | 56.2% | 53.2% | 57.8% |
| Kinaxis Inc ($KXS) | 18.7% | 23.0% | 19.2% | 28.0% | 17.6% |
| Constellation Software Inc/Canada ($CSU) | 20.9% | 20.1% | 21.8% | 25.2% | 26.0% |
| Intrinsyc Technologies Corp ($ITC) | -10.5% | -38.8% | 2.2% | 10.8% | |
| Mitel Networks Corp ($MNW) | 10.2% | 10.0% | 7.0% | 7.7% | |
| |
|---|
| Median (15 companies) | 0.6% | 2.2% | 4.3% | -1.9% | 7.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kinaxis Inc ($KXS) | 2.9% | 2.3% | 5.0% | 4.7% | 5.0% |
| Halogen Software Inc ($HGN) | 4.9% | 9.0% | 8.4% | 2.9% | 2.6% |
| Espial Group Inc ($ESP) | 1.6% | 0.2% | 1.9% | 2.1% | 1.5% |
| ProntoForms Corp ($PFM) | 1.1% | 0.8% | 3.6% | 1.9% | |
| Critical Control Energy Services Corp ($CCZ) | | 0.5% | 1.0% | 1.6% | |
| |
|---|
| Median (15 companies) | 1.1% | 0.9% | 1.2% | 1.1% | 1.0% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 45.9% | 22.4% | 24.7% | 38.5% | 40.5% |
| Kinaxis Inc ($KXS) | | 61.8% | 63.6% | 44.0% | 22.6% |
| Halogen Software Inc ($HGN) | | -28.4% | -45.9% | -40.5% | 12.6% |
| Wi-LAN Inc ($WIN) | 2.6% | -7.6% | 8.9% | 7.4% | 8.4% |
| NexJ Systems Inc ($NXJ) | | -44.6% | -19.8% | -13.9% | 4.5% |
| |
|---|
| Median (14 companies) | -5.4% | -20.1% | 0.2% | -7.5% | 8.4% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mitel Networks Corp ($MNW) | 3.7x | 3.8x | 2.6x | 6.2x | |
| Pivot Technology Solutions Inc ($PTG) | | -0.4x | 1.1x | 4.8x | |
| Constellation Software Inc/Canada ($CSU) | 0.0x | 1.6x | 0.6x | 0.4x | -0.0x |
| Wi-LAN Inc ($WIN) | -4.9x | -12.1x | -2.3x | -1.7x | -2.0x |
| Kinaxis Inc ($KXS) | 1.9x | 4.7x | -4.2x | -3.9x | -6.3x |
| |
|---|
| Median (7 companies) | 0.0x | 1.5x | -0.8x | -1.7x | -6.3x |
|---|
