Batm Advanced Communications EBITDA surged on 185% in 2015 while Revenue dropped on 11.1%

23 Mar 2016 • About Batm Advanced Communications ($BVC) • By InTwits

Batm Advanced Communications reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Batm Advanced Communications is a company in decline: 2015 revenue growth was -11.1%, 5 years revenue CAGR was -4.2%
EBITDA Margin is quite volatile: 2.5% in 2015, 0.8% in 2014, -0.3% in 2013, 3.8% in 2012, 3.4% in 2011
Batm Advanced Communications has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's in pair with industry average of 1.7%.
CAPEX is quite volatile: 1.6 in 2015, 1.5 in 2014, 2.1 in 2013, 0.66 in 2012, 1.0 in 2011
The company has unprofitable business model: ROIC is at -0.7%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Batm Advanced Communications ($BVC) key annual financial indicators

mln. $	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	110.8	113.6	114.2	109.2	97.1	-11.1%
Gross Profit	39.3	39.0	39.6	34.1	30.9	-9.3%
SG&A	25.8	26.5	27.7	26.4	23.9	-9.3%
EBITDA	3.8	4.3	-0.4	0.9	2.5	185.4%
Net Income	-3.7	0.7	-4.5	-3.2	-13.3	317.2%
Balance Sheet
Cash	23.0	42.7	13.8	15.9	17.0	6.9%
Short Term Debt	6.8	4.0	2.7	4.2	2.8	-34.0%
Long Term Debt	2.7	1.2	1.9	1.3	3.4	151.4%
Cash flow
Capex	1.7	1.4	1.7	1.8	2.5	37.6%
Ratios
Revenue growth	-8.1%	2.6%	0.5%	-4.3%	-11.1%
EBITDA growth	-49.0%	14.5%	-108.5%	-335.1%	185.4%
Gross Margin	35.5%	34.3%	34.7%	31.2%	31.8%	0.6%
EBITDA Margin	3.4%	3.8%	-0.3%	0.8%	2.5%	1.7%
Net Income Margin	-3.4%	0.6%	-4.0%	-2.9%	-13.6%	-10.7%
SG&A, % of revenue	23.3%	23.3%	24.2%	24.2%	24.7%	0.5%
CAPEX, % of revenue	1.5%	1.2%	1.5%	1.6%	2.5%	0.9%
ROIC	-1.7%	-1.0%	-5.0%	-2.6%	-0.7%	1.9%
ROE	-3.2%	0.7%	-4.2%	-3.1%	-14.6%	-11.5%
Net Debt/EBITDA	-3.6x	-8.7x		-12.1x	-4.4x	7.6x

Revenue and profitability

The company's Revenue dropped on 11.1% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.7 pp from 0.79% to 2.5% in 2015.

Gross Margin increased slightly on 0.63 pp from 31.2% to 31.8% in 2015. SG&A as a % of Revenue showed almost no change in 2015.

Net Income marign dropped on 10.7 pp from -2.9% to -13.6% in 2015.

Capital expenditures (CAPEX) and working capital investments

In 2015 Batm Advanced Communications had CAPEX/Revenue of 2.5%. CAPEX/Revenue increased slightly on 1.3 pp from 1.2% in 2012 to 2.5% in 2015. It's average CAPEX/Revenue for the last three years was 1.9%.Battling declining revenue Batm Advanced Communications invested a large share of EBITDA (99.9%) to CAPEX but that didn't help at least in this year.

Return on investment

The company operates at negative ROIC (-0.73%) and ROE (-14.58%). ROIC increased slightly on 1.9 pp from -2.6% to -0.73% in 2015. ROE dropped on 11.5 pp from -3.1% to -14.6% in 2015.

Leverage (Debt)

Debt level is -4.4x Net Debt / EBITDA and 2.5x Debt / EBITDA. Net Debt / EBITDA jumped on 7.6x from -12.1x to -4.4x in 2015. Debt jumped on 11.0% in 2015 while cash increased on 6.9% in 2015.

Appendix 1: Peers in Technology Hardware & Equipment

Below you can find Batm Advanced Communications benchmarking vs. other companies in Technology Hardware & Equipment 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	FY2011	FY2012	FY2013	FY2014	FY2015
Trakm8 Holdings ($TRAK)		24.6%	-8.9%	93.5%	94.2%
Mti Wireless Edge ($MWE)		-13.5%	5.6%	6.8%	36.5%
Concurrent Technologies ($CNC)		-7.3%	-7.3%	8.0%	33.3%
Toumaz Ld ($TMZ)		279.7%	150.3%	19.5%	22.1%
Seeing Machines ($SEE)		0.1%	66.3%	43.3%	13.3%
Median (15 companies)	-14.6%	0.4%	3.4%	3.4%	4.1%
Batm Advanced Communications ($BVC)		2.6%	0.5%	-4.3%	-11.1%

Top companies by Gross margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Cml Microsystems ($CML)	69.5%	69.3%	70.3%	73.3%	70.9%
Seeing Machines ($SEE)	69.4%	61.4%	64.1%	59.8%	44.9%
Trakm8 Holdings ($TRAK)	66.6%	63.8%	71.9%	57.2%	45.2%
Concurrent Technologies ($CNC)	52.1%	51.7%	50.6%	51.2%	50.6%
Vislink ($VLK)	41.1%	39.4%	40.7%	45.9%	45.0%
Median (18 companies)	33.9%	33.5%	34.7%	37.0%	39.7%
Batm Advanced Communications ($BVC)	35.5%	34.3%	34.7%	31.2%	31.8%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Cml Microsystems ($CML)	29.8%	28.7%	33.1%	35.1%	29.9%
Concurrent Technologies ($CNC)	28.5%	29.3%	23.3%	27.1%	28.6%
Pure Wafer ($PUR)	12.3%	16.3%	17.0%	31.5%	27.4%
Samsung Electronics Co ($SMSN)	17.6%	22.2%	23.3%	20.9%	23.6%
Trakm8 Holdings ($TRAK)	14.1%	7.1%	6.8%	12.9%	14.0%
Median (15 companies)	6.5%	4.5%	8.0%	6.4%	5.6%
Batm Advanced Communications ($BVC)	3.4%	3.8%	-0.3%	0.8%	2.5%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Samsung Electronics Co ($SMSN)	13.3%	11.4%	10.1%	10.7%	12.9%
Pure Wafer ($PUR)	2.0%	0.5%	3.5%	23.3%	8.5%
Seeing Machines ($SEE)	3.4%	0.3%	2.2%	1.0%	3.9%
Telefonaktiebolaget Lm Ericsson ($0O87)	2.2%	2.4%	2.0%	2.3%	3.4%
Trakm8 Holdings ($TRAK)	1.2%	1.7%	2.1%	3.3%	2.0%
Median (15 companies)	2.2%	2.2%	2.0%	2.3%	1.6%
Batm Advanced Communications ($BVC)	1.5%	1.2%	1.5%	1.6%	2.5%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Trakm8 Holdings ($TRAK)	13.1%	3.8%	1.9%	18.7%	22.5%
Concurrent Technologies ($CNC)	19.5%	14.6%	8.2%	14.1%	20.9%
Samsung Electronics Co ($SMSN)	13.9%	22.4%	24.0%	14.4%	14.0%
Telefonaktiebolaget Lm Ericsson ($0O87)	13.0%	13.7%	11.1%	10.3%	13.5%
Hon Hai Precision Industry ($HHPD)		9.9%	8.7%	10.3%	11.7%
Median (15 companies)	1.2%	0.7%	6.0%	6.7%	3.4%
Batm Advanced Communications ($BVC)	-1.7%	-1.0%	-5.0%	-2.6%	-0.7%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Tatung Co ($TAT)	7.0x	41.1x	6.1x	6.7x
Vislink ($VLK)	-3.4x	-1.2x	-0.5x	-0.0x	1.8x
Samsung Electronics Co ($SMSN)	-0.0x	-0.1x	-0.1x	-0.1x	-0.2x
Telefonaktiebolaget Lm Ericsson ($0O87)	0.1x	-0.1x	0.0x	-0.2x	0.1x
Compal Electronics Inc ($CEIR)	-2.0x	-0.5x	1.3x	-0.2x
Median (16 companies)	-0.3x	-0.8x	-0.7x	-1.3x	-1.0x
Batm Advanced Communications ($BVC)	-3.6x	-8.7x		-12.1x	-4.4x

Batm Advanced Communications stock price chart

Batm Advanced Communications financials

mln.	FY2010	FY2011	FY2012

Revenue	120.6	110.8	113.6
EBITDA	7.353	3.753	4.296
Net income	1.699	-3.720	0.713
CAPEX	6.392	1.672	1.375
Debt	11.559	9.420	5.263
Cash	22.087	23.012	42.686

About Batm Advanced Communications

BATM Advanced Communications Ltd. is engaged in the research and development, production, and marketing of data and telecommunication products in the field of metropolitan area networks, and medical products. The company operates in two segments, Telecommunications and BATM Medical. The Telecommunications segment is involved in the research and development, production, and marketing of data communication products in the field of local and wide area networks, and premises management systems worldwide. This segment offers telecom network solutions, which enable service providers to create an intelligent end-to-end service carrier Ethernet/MPLS network; IP surveillance solutions ranging from video management systems, including monitoring, recording, analysis, reporting, and investigation suites to digital video recorders for mid-to-large-scale deployments in mission-critical, and multi-site application environments; software services that support the product life-cycle, such as product concept creation, branding, user experience, GUI design, R&D, quality assurance, and maintenance; and cyber security solutions primarily for defense, military, and homeland security organizations. The BATM Medical segment is engaged in the research and development, production, marketing, and distribution of medical products, primarily laboratory diagnostics and sterilization equipment, as well as medical waste disposal control systems for medical laboratories and OEMs in Europe. In addition, the company provides software services, such as training, technical support and maintenance related to the communication products, mobile and Web solutions, UI, UX design, branding, graphical design, and drivers and embedded solutions. BATM Advanced Communications Ltd. was founded in 1992 and is based in Hod Hasharon, Israel.