Mti Wireless Edge reports 23.4% Net Income decline while 18.9% Revenue growth
16 Feb 2017 • About Mti Wireless Edge (
$MWE) • By InTwits
Mti Wireless Edge reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 9.1% in 2016, 12.0% in 2015, 5.5% in 2014, 4.7% in 2013, 0.9% in 2012
- Mti Wireless Edge has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's in pair with industry average of 3.0%.
- CAPEX is quite volatile: 0.84 in FY2016, 0.26 in FY2015, 0.57 in FY2014, 0.23 in FY2013, 0.16 in FY2012
- The company has potentially unprofitable business model: ROIC is at 7.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Mti Wireless Edge ($MWE) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 12.711 | 13.422 | 14.341 | 19.579 | 23.276 | 18.9% |
| Gross Profit | 4.420 | 4.798 | 5.140 | 7.709 | 8.548 | 10.9% |
| SG&A | 3.632 | 3.481 | 3.570 | 4.731 | 5.986 | 26.5% |
| EBITDA | 0.118 | 0.626 | 0.791 | 2.355 | 2.118 | -10.1% |
| Net Income | -0.365 | 0.388 | 0.247 | 1.222 | 0.936 | -23.4% |
Balance Sheet
|
|---|
| Cash | 4.648 | 0.992 | 2.918 | 2.634 | 4.428 | 68.1% |
| Short Term Debt | 0.250 | 0.562 | 0.270 | 0.792 | 0.802 | 1.3% |
| Long Term Debt | 1.813 | 1.595 | 1.345 | 2.381 | 1.664 | -30.1% |
Cash flow
|
|---|
| Capex | 0.467 | 0.270 | 0.276 | 0.297 | 0.314 | 5.7% |
Ratios
|
|---|
| Revenue growth | -13.5% | 5.6% | 6.8% | 36.5% | 18.9% | |
| EBITDA growth | -84.1% | 430.5% | 26.4% | 197.7% | -10.1% | |
| Gross Margin | 34.8% | 35.7% | 35.8% | 39.4% | 36.7% | -2.6% |
| EBITDA Margin | 0.9% | 4.7% | 5.5% | 12.0% | 9.1% | -2.9% |
| Net Income Margin | -2.9% | 2.9% | 1.7% | 6.2% | 4.0% | -2.2% |
| SG&A, % of revenue | 28.6% | 25.9% | 24.9% | 24.2% | 25.7% | 1.6% |
| CAPEX, % of revenue | 3.7% | 2.0% | 1.9% | 1.5% | 1.3% | -0.2% |
| ROIC | -1.8% | 1.0% | 1.7% | 8.7% | 7.0% | -1.7% |
| ROE | -2.1% | 2.2% | 1.4% | 6.8% | 5.0% | -1.8% |
| Net Debt/EBITDA | -21.9x | 1.9x | -1.6x | 0.2x | -0.9x | -1.2x |
Revenue and profitability
The company's Revenue jumped on 18.9% in 2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.4 pp from 3.7% to 2.3% in FY2016.
Gross Margin decreased on 2.6 pp from 39.4% to 36.7% in 2016. SG&A as a % of Revenue increased slightly on 1.6 pp from 24.2% to 25.7% in 2016.
Net Income marign decreased on 2.2 pp from 6.2% to 4.0% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 1.3%. The company's CAPEX/Revenue decreased slightly on 0.66 pp from 2.0% in 2013 to 1.3% in 2016. For the last three years the average CAPEX/Revenue was 1.6%.
Return on investment
The company operates at low ROIC (6.96%) and ROE (5.02%). ROIC decreased slightly on 1.7 pp from 8.7% to 7.0% in 2016. ROE decreased slightly on 1.8 pp from 6.8% to 5.0% in 2016.
Leverage (Debt)
Debt level is -0.9x Net Debt / EBITDA and 1.2x Debt / EBITDA. Net Debt / EBITDA dropped on 1.2x from 0.2x to -0.9x in 2016. Debt dropped on 22.3% in 2016 while cash surged on 68.1% in 2016.
Valuation
The company's trades at EV/EBITDA 3.7x and P/E 10.4x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 4.3x with the industry average at 19.0x.
Appendix 1: Peers in Technology Hardware & Equipment
Below we provide Mti Wireless Edge benchmarking against other companies in Technology Hardware & Equipment 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Trakm8 Holdings ($TRAK) | | -8.9% | 93.5% | 94.2% | 43.7% |
| Concurrent Technologies ($CNC) | -7.3% | -7.3% | 8.0% | 33.3% | |
| Toumaz Ld ($TMZ) | 279.7% | 150.3% | 19.5% | 22.1% | |
| Seeing Machines ($SEE) | | 66.3% | 43.3% | 13.3% | 76.8% |
| Telefonaktiebolaget Lm Ericsson ($0O87) | | -0.2% | 0.3% | 8.3% | -9.8% |
| |
|---|
| Median (19 companies) | 0.6% | 1.3% | 0.3% | 0.2% | 0.6% |
|---|
| Mti Wireless Edge ($MWE) | | 5.6% | 6.8% | 36.5% | 18.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cml Microsystems ($CML) | 69.3% | 70.3% | 73.3% | 70.9% | 71.2% |
| Concurrent Technologies ($CNC) | 51.7% | 50.6% | 51.2% | 50.6% | |
| Trakm8 Holdings ($TRAK) | 63.8% | 71.9% | 57.2% | 45.2% | 48.3% |
| Vislink ($VLK) | 39.4% | 40.7% | 45.9% | 45.0% | |
| Seeing Machines ($SEE) | 61.4% | 64.1% | 59.8% | 44.9% | 81.3% |
| |
|---|
| Median (18 companies) | 33.2% | 34.1% | 37.0% | 36.6% | 44.4% |
|---|
| Mti Wireless Edge ($MWE) | 34.8% | 35.7% | 35.8% | 39.4% | 36.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cml Microsystems ($CML) | 28.7% | 33.1% | 35.1% | 29.9% | 30.0% |
| Concurrent Technologies ($CNC) | 29.3% | 23.3% | 27.1% | 28.6% | |
| Pure Wafer ($PUR) | 16.3% | 17.0% | 31.5% | 27.4% | |
| Samsung Electronics Co ($SMSN) | 22.2% | 23.3% | 20.9% | 23.6% | 24.7% |
| Trakm8 Holdings ($TRAK) | 7.1% | 6.8% | 12.9% | 14.0% | 15.8% |
| |
|---|
| Median (19 companies) | 4.5% | 8.0% | 6.4% | 5.3% | 6.8% |
|---|
| Mti Wireless Edge ($MWE) | 0.9% | 4.7% | 5.5% | 12.0% | 9.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Samsung Electronics Co ($SMSN) | 11.4% | 10.1% | 10.7% | 12.9% | 12.0% |
| Pure Wafer ($PUR) | 0.5% | 3.5% | 23.3% | 8.5% | |
| Tatung Co ($TAT) | 6.1% | 4.3% | 4.3% | 6.7% | |
| Sunplus Technology Co Ltd ($SUPD) | 4.8% | 6.3% | 15.0% | 4.5% | |
| Seeing Machines ($SEE) | 0.3% | 2.2% | 1.0% | 3.9% | 1.6% |
| |
|---|
| Median (19 companies) | 2.1% | 2.0% | 2.3% | 1.8% | 1.8% |
|---|
| Mti Wireless Edge ($MWE) | 3.7% | 2.0% | 1.9% | 1.5% | 1.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Trakm8 Holdings ($TRAK) | 3.8% | 1.9% | 18.7% | 22.5% | 20.8% |
| Concurrent Technologies ($CNC) | 14.6% | 8.2% | 14.1% | 20.9% | |
| Samsung Electronics Co ($SMSN) | 22.4% | 24.0% | 14.4% | 14.0% | 14.3% |
| Telefonaktiebolaget Lm Ericsson ($0O87) | 13.7% | 11.1% | 10.3% | 13.5% | 3.9% |
| Hon Hai Precision Industry ($HHPD) | 9.9% | 8.7% | 10.3% | 11.7% | |
| |
|---|
| Median (19 companies) | 0.7% | 6.0% | 6.7% | 3.4% | 3.9% |
|---|
| Mti Wireless Edge ($MWE) | -1.8% | 1.0% | 1.7% | 8.7% | 7.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tatung Co ($TAT) | 41.1x | 6.1x | 6.7x | 40.1x | |
| Vislink ($VLK) | -1.2x | -0.5x | -0.0x | 1.8x | |
| Telefonaktiebolaget Lm Ericsson ($0O87) | -0.1x | 0.0x | -0.2x | 0.1x | 0.1x |
| Samsung Electronics Co ($SMSN) | -0.1x | -0.1x | -0.1x | -0.2x | -0.3x |
| Trakm8 Holdings ($TRAK) | -2.3x | -3.8x | -0.5x | -0.2x | 0.3x |
| |
|---|
| Median (15 companies) | -0.8x | -0.8x | -1.3x | -1.4x | -0.1x |
|---|
| Mti Wireless Edge ($MWE) | -21.9x | 1.9x | -1.6x | 0.2x | -0.9x |
