Zylog Systems reports 44.3% revenue decline in FY2016 and 1.6 pp EBITDA Margin growth from -1.8% to -0.21%
01-07-2016 • About Zylog Systems (
$ZYLOG) • By InTwits
Zylog Systems reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Zylog Systems is a company in decline: FY2016 revenue growth was -44.3%, 5 years revenue CAGR was -34.6%
- The company operates at negative EBITDA Margin: -0.2%
- EBITDA Margin is quite volatile: -0.2% in FY2016, -1.8% in FY2015, -19.1% in FY2014, 14.5% in FY2013, 18.7% in FY2012
- The company has unprofitable business model: ROIC is -3.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 44.3%. During FY2012-FY2016 Revenue growth bottomed in FY2015 at -76.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from -1.8% to -0.21% in FY2016. During the last 5 years EBITDA Margin bottomed in FY2014 at -19.1% and was growing since that time.
Net Income margin surged on 69.7 pp from -155% to -85.2% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2015 at -155%.
Leverage (Debt)
Debt level is 0.0x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt showed almost no change in FY2016 while cash dropped on 13.0%.
Zylog Systems has short term refinancing risk: cash is only 2.4% of short term debt.
Financial and operational results
Zylog Systems ($ZYLOG) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 22,729 | 24,996 | 17,290 | 4,110 | 2,288 | -44.3% |
| EBITDA | 4,242 | 3,615 | -3,301 | -76 | -5 | |
| Net Income | 2,044 | 30 | -5,592 | -6,367 | -1,950 | |
Balance Sheet
|
|---|
| Cash | 2,005 | 860 | 296 | 271 | 236 | -13.0% |
| Short Term Debt | 4,954 | 7,221 | 7,618 | 8,004 | 9,834 | 22.9% |
| Long Term Debt | 2,578 | 3,130 | 3,374 | 2,152 | 306 | -85.8% |
Cash flow
|
|---|
| Capex | 1,351 | 4,578 | 90 | | | |
Ratios
|
|---|
| Revenue growth | 18.6% | 10.0% | -30.8% | -76.2% | -44.3% | |
| EBITDA growth | 36.0% | -14.8% | -191.3% | -97.7% | -93.7% | |
|
|---|
| EBITDA Margin | 18.7% | 14.5% | -19.1% | -1.8% | -0.2% | 1.6% |
| Net Income Margin | 9.0% | 0.1% | -32.3% | -154.9% | -85.2% | 69.7% |
| CAPEX, % of revenue | 5.9% | 18.3% | 0.5% | | | |
|
|---|
| ROIC | 24.2% | 9.6% | -33.4% | -15.2% | -3.7% | 11.5% |
| ROE | 25.7% | 0.3% | -84.6% | | | |
| Net Debt/EBITDA | 1.3x | 2.6x | | | |
Peers in IT Software Products
Below you can find Zylog Systems benchmarking vs. other companies in IT Software Products 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 |
|---|
| Trigyn Technologies ($TRIGYN) | - | 27.1% | 29.8% | 9.1% | 26.9% |
| Tata Elxsi ($TATAELXSI) | - | 15.4% | 24.6% | 9.6% | 26.6% |
| Polaris Financial Technology ($POLARIS) | - | 10.2% | 7.3% | -21.9% | 7.6% |
| Cranes Software International ($CRANESSOFT) | - | 14.8% | 9.4% | 8.4% | 5.6% |
| Saksoft ($SAKSOFT) | - | 29.5% | 41.1% | 3.1% | 5.3% |
| |
|---|
| Median (15 companies) | 5.1% | 17.7% | 21.8% | 9.7% | -2.2% |
|---|
| Zylog Systems ($ZYLOG) | - | 10.0% | -30.8% | -76.2% | -44.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Atishay Infotech ($ATISHAY) | 35.7% | 28.1% | 25.8% | 24.5% | 21.9% |
| Subex ($SUBEX) | 27.3% | 17.0% | 24.9% | 23.6% | 20.8% |
| Tata Elxsi ($TATAELXSI) | 13.8% | 11.9% | 17.6% | 20.9% | 23.0% |
| Cambridge Technology Enterprises ($CTE) | - | - | - | 20.9% | - |
| Virinchi Technologies ($VIRNICHIQ) | - | - | - | 17.4% | - |
| |
|---|
| Median (23 companies) | 7.5% | 8.5% | 10.2% | 9.4% | 11.2% |
|---|
| Zylog Systems ($ZYLOG) | 18.7% | 14.5% | -19.1% | -1.8% | -0.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dion Global Solutions ($DION) | 39.9% | 11.9% | 29.6% | 4.0% | 18.4% |
| Aurionpro Solutions ($AURIONPRO) | 17.5% | 12.3% | 12.6% | 13.4% | 6.1% |
| Tata Elxsi ($TATAELXSI) | 5.3% | 5.4% | 3.1% | 3.9% | 3.6% |
| Datamatics Global Services ($DATAMATICS) | 20.2% | 3.1% | 12.9% | 2.2% | 3.5% |
| Mastek ($MASTKBBPH) | 2.2% | - | 0.0% | 4.9% | 2.4% |
| |
|---|
| Median (8 companies) | 3.1% | 4.3% | 2.7% | 3.0% | 2.9% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tata Elxsi ($TATAELXSI) | 22.5% | 19.1% | 38.3% | 55.4% | 65.9% |
| Polaris Financial Technology ($POLARIS) | 19.5% | 15.1% | 12.6% | 16.2% | 24.8% |
| Saksoft ($SAKSOFT) | 11.0% | 13.5% | - | - | 22.3% |
| Aurionpro Solutions ($AURIONPRO) | 8.6% | 8.6% | 5.9% | 12.1% | 11.0% |
| Mindteck (India) ($MINDTECK) | -2.6% | 1.2% | 20.0% | 17.5% | 10.6% |
| |
|---|
| Median (28 companies) | 3.8% | 4.7% | 16.3% | 14.2% | 10.8% |
|---|
| Zylog Systems ($ZYLOG) | 24.2% | 9.6% | -33.4% | -15.2% | -3.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Aurionpro Solutions ($AURIONPRO) | 1.7x | 1.7x | 1.9x | 1.2x | 1.3x |
| Subex ($SUBEX) | 4.6x | 13.1x | 8.5x | 8.0x | 0.9x |
| Datamatics Global Services ($DATAMATICS) | 0.5x | 0.3x | 0.5x | 0.3x | 0.4x |
| Saksoft ($SAKSOFT) | 2.8x | 2.3x | 0.0x | 1.2x | 0.3x |
| Melstar Information Technologies ($MELSTAR) | 1.0x | - | - | - | 0.0x |
| |
|---|
| Median (16 companies) | 0.5x | 0.0x | 0.0x | 0.0x | 0.0x |
|---|
