Sigma Designs Inc revenue decline accelerated to 51.0% in FY2018 vs. 40.9% a year earliner
04/20/2018 • About Sigma Designs Inc (
$SIGM) • By InTwits
Sigma Designs Inc reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Sigma Designs Inc is a company in decline: FY2018 revenue growth was -51.0%, 5 years revenue CAGR was -21.2%
- The company operates at negative EBITDA Margin: -157.3%
- Sigma Designs Inc spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 0.0%. Average EBITDA Margin for the same period was -9.2%
- Sigma Designs Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.4%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: $0m in FY2018, $0m in FY2017, $0m in FY2016, $0m in FY2015, $0m in FY2014
- The company has unprofitable business model: ROIC is -125.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Sigma Designs Inc's Revenue dropped on 51.0%. During the last 5 years Revenue growth topped in FY2016 at 20.7% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.8 pp from -48.9% to -39.1% in FY2018.
Gross Margin decreased on 4.2 pp from 41.3% to 37.1% in FY2018. Gross Margin declined at -4.4 pp per annum in FY2014-FY2018. SG&A as a % of Revenue jumped on 26.8 pp from 18.0% to 44.7% in FY2018.
Net Income margin dropped on 169 pp from -13.6% to -182% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 29.3%. CAPEX/Revenue jumped on 22.7 pp from 6.5% in FY2015 to 29.3% in FY2018. Average CAPEX/Revenue for the last three years was 16.5%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2016 at 6.2% and was growing since that time.
Return on investment
The company operates at negative ROIC (-125.0%) and ROE (-130.7%). ROIC dropped on 107 pp from -18.1% to -125% in FY2018. ROE dropped on 118 pp from -12.4% to -131% in FY2018.
Leverage (Debt)
The company has no debt. Cash dropped on 40.0%.
Management team
Elias N Nader is a the company's CEO. Elias N Nader is a founder and has spent 1 year with the company. Sigma Designs Inc's CFO is Elias N Nader. Elias N Nader has 1 year tenure at the company.
Financial and operational results
FY ended 02/03/2018
Sigma Designs Inc ($SIGM) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 199.2 | 188.3 | 227.3 | 134.4 | 65.9 | -51.0% |
| Gross Profit | 108.1 | 95.3 | 113.2 | 55.5 | 24.5 | -55.9% |
| SG&A | 41.3 | 41.9 | 43.7 | 24.1 | 29.5 | 22.1% |
| EBITDA | 10.6 | 3.8 | 20.8 | -6.4 | -103.6 | |
| Net Income | -11.0 | -21.7 | 0.2 | -18.3 | -120.0 | |
Balance Sheet
|
|---|
| Cash | 64.3 | 83.5 | 63.8 | 64.4 | 38.6 | -40.0% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 21.9 | 12.3 | 14.1 | 19.0 | 19.3 | 1.7% |
Ratios
|
|---|
| Revenue growth | -8.0% | -5.5% | 20.7% | -40.9% | -51.0% | |
| EBITDA growth | -117.8% | -63.8% | 443.4% | -130.5% | 1,530.7% | |
|
|---|
| Gross Margin | 54.3% | 50.6% | 49.8% | 41.3% | 37.1% | -4.2% |
| EBITDA Margin | 5.3% | 2.0% | 9.2% | -4.7% | -157.3% | -152.5% |
| SG&A, % of revenue | 20.7% | 22.3% | 19.2% | 18.0% | 44.7% | 26.8% |
| Net Income Margin | -5.5% | -11.5% | 0.1% | -13.6% | -182.1% | -168.5% |
| CAPEX, % of revenue | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% | 15.2% |
|
|---|
| ROIC | -6.0% | -11.8% | -0.8% | -18.1% | -125.0% | -107.0% |
| ROE | -6.9% | -14.4% | 0.1% | -12.4% | -130.7% | -118.4% |
| Net Debt/EBITDA | -6.1x | -21.8x | -3.1x | | |
Peers in Semiconductors
Below we provide Sigma Designs Inc benchmarking against other companies in Semiconductors 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 9.7% | 4.4% | 11.0% | 5.0% |
|---|
| Sigma Designs Inc ($SIGM) | | -5.5% | 20.7% | -40.9% | -51.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 45.3% | 47.0% | 47.2% | 49.1% | 51.0% |
|---|
| Sigma Designs Inc ($SIGM) | 54.3% | 50.6% | 49.8% | 41.3% | 37.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.9% | 11.5% | 9.2% | 10.7% | 10.0% |
|---|
| Sigma Designs Inc ($SIGM) | 5.3% | 2.0% | 9.2% | -4.7% | -157.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| Sequans Communications S.A. ($SQNS) | 0.0% | 16.9% | 11.8% | 13.3% | 22.9% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.6% | 4.7% | 4.4% |
|---|
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.7% | 3.8% | 1.7% | 4.0% | 5.2% |
|---|
| Sigma Designs Inc ($SIGM) | -6.0% | -11.8% | -0.8% | -18.1% | -125.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (46 companies) | -0.5x | -0.2x | 0.4x | 0.4x | 0.3x |
|---|
