Concurrent Technologies reports 11.8% EBITDA decline and 3.8% Revenue decline

24 Mar 2017 • About Concurrent Technologies ($CNC) • By InTwits

Concurrent Technologies reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

• Concurrent Technologies has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's a lot of higher than industry average of 4.4%.
• CAPEX is quite volatile: 0.44 in FY2016, 0.16 in FY2015, 0.17 in FY2014, 0.10 in FY2013, 0.18 in FY2012
• The company has highly profitable business model: ROIC is at 15.9%

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

Concurrent Technologies ($CNC) key annual financial indicators

mln. £	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	12.794	11.859	12.806	17.074	16.424	-3.8%
Gross Profit	6.611	6.002	6.559	8.636	8.894	3.0%
EBITDA	3.752	2.763	3.468	4.882	4.305	-11.8%
Net Income	1.967	0.730	1.648	2.755	2.830	2.7%
Balance Sheet
Cash	2.317	2.341	5.625	4.874	6.773	39.0%
Short Term Debt	0.000	0.000	0.000	0.000	0.000
Long Term Debt	0.000	0.000	0.000	0.000	0.000
Cash flow
Capex	0.181	0.226	0.304	0.306	0.138	-54.8%
Ratios
Revenue growth	-7.3%	-7.3%	8.0%	33.3%	-3.8%
EBITDA growth	-4.7%	-26.4%	25.5%	40.8%	-11.8%
Gross Margin	51.7%	50.6%	51.2%	50.6%	54.2%	3.6%
EBITDA Margin	29.3%	23.3%	27.1%	28.6%	26.2%	-2.4%
Net Income Margin	15.4%	6.2%	12.9%	16.1%	17.2%	1.1%
CAPEX, % of revenue	1.4%	1.9%	2.4%	1.8%	0.8%	-1.0%
ROIC	14.6%	8.2%	14.1%	20.9%	15.9%	-5.0%
ROE	14.1%	5.2%	11.8%	18.3%	16.9%	-1.4%
Net Debt/EBITDA	-0.6x	-0.8x	-1.6x	-1.0x	-1.6x	-0.6x

Revenue and profitability

The company's Revenue decreased on 3.8% in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.4 pp from 28.6% to 26.2% in FY2016.

Gross Margin increased on 3.6 pp from 50.6% to 54.2% in FY2016.

Net Income marign increased slightly on 1.1 pp from 16.1% to 17.2% in FY2016.

Capital expenditures (CAPEX) and working capital investments

The company's CAPEX/Revenue was 0.84% in FY2016. The company showed small CAPEX/Revenue decline of 1.1 pp from 1.9% in FY2013 to 0.84% in FY2016. For the last three years the average CAPEX/Revenue was 1.7%.

Return on investment

The company operates at good ROIC (15.92%) and ROE (16.90%). ROIC decreased on 5.0 pp from 20.9% to 15.9% in FY2016. ROE decreased slightly on 1.4 pp from 18.3% to 16.9% in FY2016.

Leverage (Debt)

The company has no debt. Cash surged on 39.0% in FY2016.

Appendix 1: Peers in Technology Hardware & Equipment

Below you can find Concurrent Technologies 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	FY2012	FY2013	FY2014	FY2015	FY2016
Trakm8 Holdings ($TRAK)		-8.9%	93.5%	94.2%	43.7%
Mti Wireless Edge ($MWE)		5.6%	6.8%	36.5%	18.9%
Toumaz Ld ($TMZ)		150.3%	19.5%	22.1%	0.3%
Seeing Machines ($SEE)		66.3%	43.3%	13.3%	76.8%
Telefonaktiebolaget Lm Ericsson ($0O87)		-0.2%	0.3%	8.3%	-9.8%
Median (19 companies)	6.2%	3.4%	0.3%	0.2%	0.3%
Concurrent Technologies ($CNC)		-7.3%	8.0%	33.3%	-3.8%

Top companies by Gross margin, %

Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Cml Microsystems ($CML)	69.3%	70.3%	73.3%	70.9%	71.2%
Trakm8 Holdings ($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%
Toumaz Ld ($TMZ)	45.6%	44.4%	43.6%	42.4%
Median (18 companies)	33.2%	34.1%	36.0%	36.6%	34.0%
Concurrent Technologies ($CNC)	51.7%	50.6%	51.2%	50.6%	54.2%

Top companies by EBITDA margin, %

Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Cml Microsystems ($CML)	28.7%	33.1%	35.1%	29.9%	30.0%
Pure Wafer ($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%
Telefonaktiebolaget Lm Ericsson ($0O87)	13.9%	12.4%	11.8%	13.0%	6.8%
Median (19 companies)	3.8%	6.8%	5.6%	5.3%	6.8%
Concurrent Technologies ($CNC)	29.3%	23.3%	27.1%	28.6%	26.2%

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 ($SEE)	0.3%	2.2%	1.0%	3.9%	1.6%
Median (19 companies)	2.2%	2.0%	1.9%	1.8%	1.6%
Concurrent Technologies ($CNC)	1.4%	1.9%	2.4%	1.8%	0.8%

Top companies by ROIC, %

Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Trakm8 Holdings ($TRAK)	3.8%	1.9%	18.7%	22.5%	20.8%
Samsung Electronics Co ($SMSN)	22.4%	24.0%	14.4%	14.0%	14.3%
Lite-On Technology Corp ($LTTD)	8.9%	8.2%	5.7%	7.0%	10.6%
Cml Microsystems ($CML)	17.4%	26.1%	23.0%	10.3%	10.1%
Mti Wireless Edge ($MWE)	-1.8%	1.0%	1.7%	8.7%	7.0%
Median (15 companies)	0.6%	5.8%	5.7%	3.4%	3.9%
Concurrent Technologies ($CNC)	14.6%	8.2%	14.1%	20.9%	15.9%

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
Mti Wireless Edge ($MWE)	-21.9x	1.9x	-1.6x	0.2x	-0.9x
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
Median (15 companies)	-1.1x	-0.5x	-1.3x	-1.4x	-0.9x
Concurrent Technologies ($CNC)	-0.6x	-0.8x	-1.6x	-1.0x	-1.6x

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