AVX Corporation reports 96.1% Net Income decline in 2018 and almost no change in EBITDA Margin of 15.3%
04/25/2018 • About AVX Corporation (
$AVX) • By InTwits
AVX Corporation reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- AVX Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.9%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: $101m in FY2018, $66m in FY2017, $48m in FY2016, $27m in FY2015, $27m in FY2014
- The company has business model with low profitability: ROIC is 8.4%
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 surged on 19.0%. Revenue growth showed acceleration in FY18Q4 - it increased 35.5% YoY. During the last 5 years Revenue growth bottomed in FY2016 at -11.7% and was accelerating since that time. EBITDA Margin showed almost no change in FY2018.
Gross Margin decreased slightly on 1.3 pp from 21.7% to 20.4% in FY2018. During FY2014-FY2018 Gross Margin topped in FY2015 at 24.3% and was declining since that time. SG&A as a % of Revenue decreased slightly on 1.4 pp from 7.7% to 6.3% in FY2018. During FY2014-FY2018 SG&A as a % of Revenue topped in FY2016 at 8.9% and was declining since that time. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2018. SBC as a % of Revenue was relatively stable in the last 5 years.
Net Income margin decreased on 9.3 pp from 9.6% to 0.31% in FY2018. The efficient tax rate was 97.4% in FY2018.
Investments (CAPEX, working capital and M&A)
AVX Corporation's CAPEX/Revenue was 6.4% in FY2018. CAPEX/Revenue increased on 4.5 pp from 2.0% in FY2015 to 6.4% in FY2018. It's average CAPEX/Revenue for the last three years was 5.2%. CAPEX as a % of Revenue stuck to a growing trend at 1.2 pp per annum in FY2014-FY2018.
Accounts receivable as a % of Revenue increased on 4.2 pp from 13.5% to 17.6% in FY2018. Inventories as a % of Revenue decreased on 3.0 pp from 36.1% to 33.1% in FY2018. Accounts payable as a % of Revenue increased on 3.0 pp from 4.3% to 7.2% in FY2018.
AVX Corporation has spent
$290m on M&A in FY2018 which accounts for 18.6% of revenue.
Return on investment
The company operates at low ROIC (8.4%) and ROE (0.2%). ROIC increased slightly on 0.51 pp from 7.9% to 8.4% in FY2018. ROE decreased on 5.5 pp from 5.7% to 0.22% in FY2018.
Leverage (Debt)
The company has no debt. Cash decreased on 5.4%.
Valuation and dividends
The company's trades at EV/EBITDA 8.2x and P/E 513.9x.
The company paid 1,547.9% of Net Income as dividends in FY2018. Dividends grew on average at 4.8% per annum in the last 5 years).
Management team
CEO total compensation was
$1,109,820 in FY2018 which included
$484,848 salary and
$34,831 annual bonus.
Insider ownership is 0.17%. Insider ownership didn't change in 2018.
At the end of financial year the company had 14,920 employees. The number of employees surged on 38.1%. Average revenue per employee in FY2018 was
$104,723 and it dropped on 13.8%.
Financial and operational results
FY ended 03/31/2018
AVX Corporation ($AVX) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 1,443 | 1,353 | 1,196 | 1,313 | 1,562 | 19.0% |
| Gross Profit | 279 | 329 | 289 | 285 | 319 | 12.0% |
| SG&A | 109 | 104 | 106 | 101 | 99 | -2.5% |
| EBITDA | 209 | 255 | 163 | 206 | 240 | 16.2% |
| EBIT | 159 | 213 | 124 | 164 | 180 | 10.0% |
| Interest expence | 2 | | 1 | | | |
| Tax | 36 | -7 | 31 | 49 | 187 | 281.2% |
| Net Income | 127 | 226 | 102 | 126 | 5 | -96.1% |
| Stock Based Compensation | 1 | 1 | 1 | 2 | 3 | 46.4% |
Balance Sheet
|
|---|
| Cash | 461 | 382 | 454 | 579 | 547 | -5.4% |
| Accounts Receivable | 206 | 187 | 162 | 177 | 275 | 55.8% |
| Inventory | 551 | 536 | 484 | 474 | 517 | 9.0% |
| Accounts Payable | 50 | 35 | 42 | 44 | 90 | 105.0% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 27 | 27 | 48 | 66 | 101 | 51.7% |
| Dividends | 60 | 67 | 70 | 72 | 76 | 5.6% |
| Acquisitions | 2 | | | | 290 | |
Ratios
|
|---|
| Revenue growth | 2.0% | -6.2% | -11.7% | 9.8% | 19.0% | |
| EBITDA growth | -386.9% | 21.8% | -36.1% | 26.6% | 16.2% | |
|
|---|
| Gross Margin | 19.3% | 24.3% | 24.2% | 21.7% | 20.4% | -1.3% |
| EBITDA Margin | 14.5% | 18.8% | 13.6% | 15.7% | 15.3% | -0.4% |
| EBIT Margin | 11.0% | 15.7% | 10.4% | 12.5% | 11.5% | -1.0% |
| SG&A, % of revenue | 7.6% | 7.7% | 8.9% | 7.7% | 6.3% | -1.4% |
| SBC, % of revenue | 0.1% | 0.1% | 0.1% | 0.2% | 0.2% | 0.0% |
| Net Income Margin | 8.8% | 16.7% | 8.5% | 9.6% | 0.3% | -9.3% |
| CAPEX, % of revenue | 1.9% | 2.0% | 4.0% | 5.0% | 6.4% | 1.4% |
|
|---|
| ROIC | 8.2% | 10.5% | 6.0% | 7.9% | 8.4% | 0.5% |
| ROE | 6.3% | 10.8% | 4.7% | 5.7% | 0.2% | -5.5% |
| Net Debt/EBITDA | -2.2x | -1.5x | -2.8x | -2.8x | -2.3x | 0.5x |
People
|
|---|
| Insider ownership | 0.2% | 0.2% | 0.2% | 0.2% | 0.2% | 0.0% |
| Employees | 10,900 | 10,400 | 10,200 | 10,800 | 14,920 | 38.1% |
| Revenue/Employee, th. $ | 132 | 130 | 117 | 122 | 105 | -13.8% |
AVX Corporation ($AVX) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 331 | 353 | 432 | 447 | | 5.3% | 7.7% | 26.7% | 35.5% |
| EBITDA | 53 | 56 | 62 | 69 | | 19.0% | 30.0% | 0.5% | 20.7% |
| Net Income | 31 | 35 | -93 | 32 | | 5.3% | 31.3% | -362.4% | -6.0% |
Balance Sheet
|
|---|
| Cash | 634 | 619 | 464 | 547 | | 31.1% | 21.0% | -3.5% | -5.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 22.3% | 21.9% | 19.0% | 19.2% | | 0.1% | 3.0% | -4.3% | -3.2% |
| EBITDA Margin | 15.9% | 15.8% | 14.4% | 15.4% | | 1.8% | 2.7% | -3.8% | -1.9% |
| Net Income Margin | 9.5% | 9.9% | -21.6% | 7.1% | | 0.0% | 1.8% | -32.0% | -3.1% |
Peers in Electronic Components
Below we provide AVX Corporation benchmarking against other companies in Electronic Components 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 |
|---|
| Superconductor Technologies Inc. ($SCON) | | -61.4% | -46.3% | 240.5% | 248.9% |
| Akoustis Technologies, Inc. ($AKTS) | | | | | 148.3% |
| CPS Technologies Corp. ($CPSH) | | -5.9% | -29.5% | -5.0% | 48.0% |
| Littelfuse, Inc. ($LFUS) | | 1.9% | 21.7% | 15.7% | 40.7% |
| Cavitation Technologies Inc ($CVAT) | | -73.6% | 267.5% | -40.9% | 22.6% |
| |
|---|
| Median (22 companies) | | 0.0% | 2.1% | 7.7% | 14.1% |
|---|
| AVX Corporation ($AVX) | | -6.2% | -11.7% | 9.8% | 19.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cavitation Technologies Inc ($CVAT) | 93.5% | 85.0% | 93.2% | 93.5% | 90.6% |
| Dolby Laboratories ($DLB) | 92.7% | 90.2% | 89.4% | 89.1% | 87.9% |
| Flexpoint Sensor Systems Inc ($FLXT) | 96.7% | 95.2% | 92.7% | 87.9% | 86.1% |
| Airgain, Inc. ($AIRG) | 44.6% | 41.9% | 44.4% | 47.1% | 43.7% |
| II-VI Incorporated ($IIVI) | 33.2% | 36.6% | 37.8% | 40.0% | 39.8% |
| |
|---|
| Median (22 companies) | 33.2% | 36.7% | 33.7% | 38.3% | 37.6% |
|---|
| AVX Corporation ($AVX) | 19.3% | 24.3% | 24.2% | 21.7% | 20.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Corning Incorporated ($GLW) | 32.2% | 27.5% | 27.9% | 27.3% | 25.4% |
| Dolby Laboratories ($DLB) | 34.1% | 29.1% | 30.9% | 30.8% | 25.1% |
| Amphenol Corporation ($APH) | 22.5% | 22.9% | 22.6% | 23.6% | 24.2% |
| Vishay Intertechnology, Inc. ($VSH) | 14.8% | 11.9% | 15.4% | 18.7% | 21.3% |
| IEH Corp ($IEHC) | 18.4% | 21.2% | 18.0% | 16.3% | 20.2% |
| |
|---|
| Median (22 companies) | 8.6% | 11.9% | 14.1% | 8.7% | 9.3% |
|---|
| AVX Corporation ($AVX) | 14.5% | 18.8% | 13.6% | 15.7% | 15.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Akoustis Technologies, Inc. ($AKTS) | | | | 334.0% | 574.7% |
| CBAK Energy Technology, Inc. ($CBAK) | 8.0% | 92.4% | 57.2% | 20.6% | 30.1% |
| Corning Incorporated ($GLW) | 11.1% | 13.7% | 12.0% | 17.8% | 19.9% |
| II-VI Incorporated ($IIVI) | 4.3% | 7.1% | 7.0% | 14.3% | 13.2% |
| Superconductor Technologies Inc. ($SCON) | 586.1% | 57.8% | 0.0% | 34.1% | 12.1% |
| |
|---|
| Median (22 companies) | 4.2% | 3.1% | 3.0% | 4.3% | 3.8% |
|---|
| AVX Corporation ($AVX) | 1.9% | 2.0% | 4.0% | 5.0% | 6.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vishay Intertechnology, Inc. ($VSH) | 8.3% | 4.5% | 9.8% | 18.4% | 27.8% |
| IEH Corp ($IEHC) | 27.7% | 28.2% | 24.2% | 19.2% | 26.1% |
| Amphenol Corporation ($APH) | 19.1% | 18.5% | 18.3% | 19.2% | 21.1% |
| Inrad Optics Inc ($INRD) | -26.7% | -5.2% | -9.2% | -10.4% | 17.7% |
| Littelfuse, Inc. ($LFUS) | 14.3% | 11.1% | 11.7% | 15.8% | 12.1% |
| |
|---|
| Median (22 companies) | 6.8% | 5.8% | 5.1% | 6.0% | 7.8% |
|---|
| AVX Corporation ($AVX) | 8.2% | 10.5% | 6.0% | 7.9% | 8.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Belden Inc ($BDC) | 3.9x | 5.2x | 2.1x | 2.6x | 2.3x |
| Inrad Optics Inc ($INRD) | | 9.9x | | | 1.4x |
| Corning Incorporated ($GLW) | -0.7x | -0.0x | -0.5x | 0.3x | 1.3x |
| Bel Fuse Inc. ($BELFA) | 4.6x | 2.0x | | 1.4x | 1.3x |
| Amphenol Corporation ($APH) | 1.4x | 0.8x | 1.4x | 1.1x | 1.2x |
| |
|---|
| Median (14 companies) | -0.6x | -0.1x | -0.4x | -0.0x | 0.7x |
|---|
| AVX Corporation ($AVX) | -2.2x | -1.5x | -2.8x | -2.8x | -2.3x |
