Integrated Device Technology, Inc. Net Income dropped on 111% and EBITDA Margin increased slightly on 0.82 pp from 21.3% to 22.1%
04/30/2018 • About Integrated Device Technology, Inc. (
$IDTI) • By InTwits
Integrated Device Technology, Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Integrated Device Technology, Inc. is a growth stock: FY2018 revenue growth was 15.7%, 5 year revenue CAGR was 11.7% at FY2018 ROIC 10.4%
- Integrated Device Technology, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 4.7%. Average EBITDA Margin for the same period was 21.8%. In FY2018 SBC/Revenue was even higher: 6.0%
- Integrated Device Technology, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.6%. At the same time it's in pair with industry average of 8.7%
- CAPEX is quite volatile: $46m in FY2018, $27m in FY2017, $16m in FY2016, $18m in FY2015, $17m in FY2014
- In the last 5 years the company invested considerably less than D&A: $124m vs. $224m. In FY2018 this situation was still the same: CAPEX was 46 while D&A was 75
- The company has business model with average profitability: ROIC is 10.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.9x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Integrated Device Technology, Inc.'s Revenue jumped on 15.7%. Revenue growth showed acceleration in FY18Q4 - it increased 27.8% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.82 pp from 21.3% to 22.1% in FY2018.
Gross Margin decreased slightly on 0.53 pp from 57.8% to 57.2% in FY2018. During the last 5 years Gross Margin topped in FY2016 at 60.5% and was declining since that time. SG&A as a % of Revenue showed almost no change in FY2018. During FY2014-FY2018 SG&A as a % of Revenue bottomed in FY2015 at 18.6% and was growing since that time. Stock Based Compensation (SBC) as a % of Revenue increased slightly on 0.55 pp from 5.5% to 6.0% in FY2018. SBC as a % of Revenue stuck to a growing trend at 0.81 pp per annum in the last 5 years.
Net Income margin dropped on 16.6 pp from 15.2% to -1.4% in FY2018.
Investments (CAPEX, working capital and M&A)
Integrated Device Technology, Inc.'s CAPEX/Revenue was 5.4% in FY2018. CAPEX/Revenue increased on 2.3 pp from 3.1% in FY2015 to 5.4% in FY2018. It's average level of CAPEX/Revenue for the last three years was 3.8%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2016 at 2.3% and was growing since that time.
Accounts receivable as a % of Revenue increased slightly on 0.64 pp from 12.3% to 12.9% in FY2018. Inventories as a % of Revenue increased slightly on 0.97 pp from 7.2% to 8.2% in FY2018. Accounts payable as a % of Revenue decreased on 2.3 pp from 13.7% to 11.4% in FY2018.
Integrated Device Technology, Inc. has spent
$238m on M&A in FY2018 which accounts for 28.2% of revenue.
Return on investment
The company operates at low but positive ROIC (10.4%) and negative ROE (-1.7%). ROIC decreased slightly on 1.2 pp from 11.6% to 10.4% in FY2018. ROE dropped on 16.9 pp from 15.2% to -1.7% in FY2018. During FY2014-FY2018 ROIC topped in FY2016 at 16.0% and was declining since that time.
Leverage (Debt)
Debt level is 1.9x Net Debt / EBITDA and 2.6x Debt / EBITDA. Net Debt / EBITDA surged on 1.5x from 0.5x to 1.9x in FY2018. Debt jumped on 72.5% while cash dropped on 36.2%. Net Debt/EBITDA followed a growing trend at 0.8x per annum in the last 5 years.
Integrated Device Technology, Inc. has good short term financial stability: Interest coverage ratio (ICR) is 4.1x. Integrated Device Technology, Inc. has no short term refinancing risk: cash is higher than short term debt (6,843.7%).
Average interest expence charged on company's debt was 5.6% in FY2018.
Management team
The company has 1,821 employees. The number of employees surged on 12.2%. Average revenue per employee in FY2018 was
$462,803 and it increased on 3.1%.
Financial and operational results
FY ended 04/01/2018
Integrated Device Technology, Inc. ($IDTI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 484.8 | 572.9 | 697.4 | 728.2 | 842.8 | 15.7% |
| Gross Profit | 272.9 | 345.3 | 421.7 | 420.6 | 482.3 | 14.7% |
| SG&A | 101.1 | 106.5 | 136.5 | 145.2 | 168.6 | 16.2% |
| EBITDA | 76.6 | 136.5 | 170.3 | 154.8 | 186.1 | 20.2% |
| EBIT | 31.0 | 111.1 | 136.6 | 110.3 | 110.9 | 0.5% |
| Interest expence | 0.0 | 0.0 | 7.0 | 16.9 | 27.4 | 62.1% |
| Tax | 1.0 | 1.4 | -61.4 | -9.9 | 104.3 | |
| Net Income | 88.4 | 93.9 | 194.7 | 110.5 | -12.1 | -111.0% |
| Stock Based Compensation | 13.4 | 22.3 | 29.7 | 39.9 | 50.8 | 27.4% |
Balance Sheet
|
|---|
| Cash | 91.2 | 116.9 | 203.2 | 214.6 | 136.9 | -36.2% |
| Accounts Receivable | 68.9 | 63.6 | 74.4 | 89.3 | 108.8 | 21.8% |
| Inventory | 49.6 | 45.4 | 54.2 | 52.3 | 68.7 | 31.4% |
| Accounts Payable | 25.4 | 28.0 | 39.9 | 42.0 | 41.1 | -2.3% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 2.0 | |
| Long Term Debt | 0.0 | 0.0 | 272.2 | 285.5 | 490.6 | 71.8% |
Cash flow
|
|---|
| Capex | 17.4 | 17.8 | 16.3 | 27.1 | 45.6 | 68.4% |
| Acquisitions | | | 279.1 | 1.5 | 237.7 | 15,457.3% |
Ratios
|
|---|
| Revenue growth | 0.1% | 18.2% | 21.7% | 4.4% | 15.7% | |
| EBITDA growth | 130.5% | 78.2% | 24.8% | -9.1% | 20.2% | |
|
|---|
| Gross Margin | 56.3% | 60.3% | 60.5% | 57.8% | 57.2% | -0.5% |
| EBITDA Margin | 15.8% | 23.8% | 24.4% | 21.3% | 22.1% | 0.8% |
| EBIT Margin | 6.4% | 19.4% | 19.6% | 15.2% | 13.2% | -2.0% |
| SG&A, % of revenue | 20.9% | 18.6% | 19.6% | 19.9% | 20.0% | 0.1% |
| SBC, % of revenue | 2.8% | 3.9% | 4.3% | 5.5% | 6.0% | 0.6% |
| Net Income Margin | 18.2% | 16.4% | 27.9% | 15.2% | -1.4% | -16.6% |
| CAPEX, % of revenue | 3.6% | 3.1% | 2.3% | 3.7% | 5.4% | 1.7% |
|
|---|
| ROIC | 4.5% | 14.5% | 16.0% | 11.6% | 10.4% | -1.2% |
| ROE | 13.0% | 12.3% | 26.6% | 15.2% | -1.7% | -16.9% |
| Net Debt/EBITDA | -1.2x | -0.9x | 0.4x | 0.5x | 1.9x | 1.5x |
| Interest expence / Average debt | | | 5.2% | 6.1% | 5.6% | -0.5% |
People
|
|---|
| Employees | 1,484 | 1,447 | 1,767 | 1,623 | 1,821 | 12.2% |
| Revenue/Employee, th. $ | 327 | 396 | 395 | 449 | 463 | 3.1% |
Integrated Device Technology, Inc. ($IDTI) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 197 | 204 | 217 | 225 | | 2.4% | 11.1% | 23.1% | 27.8% |
| EBITDA | 37 | 40 | 54 | 54 | | 20.4% | 6.1% | 22.7% | 30.4% |
| Net Income | 17 | 19 | -68 | 21 | | -20.2% | -24.0% | -296.5% | -31.4% |
Balance Sheet
|
|---|
| Cash | 145 | 148 | 133 | 137 | | -4.3% | 29.9% | 13.2% | -36.2% |
| Short Term Debt | 2 | 2 | 2 | 2 | | | | | |
| Long Term Debt | 481 | 484 | 487 | 491 | | 74.6% | 73.6% | 72.7% | 71.8% |
Ratios
|
|---|
| Gross Margin | 55.9% | 57.1% | 59.1% | 56.6% | | -0.5% | -0.8% | 0.1% | -1.3% |
| EBITDA Margin | 19.1% | 19.8% | 25.1% | 23.9% | | 2.9% | -0.9% | -0.1% | 0.5% |
| Net Income Margin | 8.5% | 9.1% | -31.4% | 9.2% | | -2.4% | -4.2% | -51.1% | -8.0% |
Peers in Semiconductors
Below you can find Integrated Device Technology, Inc. benchmarking vs. other companies in Semiconductors 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 | 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 ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 8.5% | 4.4% | 11.0% | 4.7% |
|---|
| Integrated Device Technology, Inc. ($IDTI) | | 18.2% | 21.7% | 4.4% | 15.7% |
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. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 45.3% | 47.0% | 47.2% | 48.6% | 50.4% |
|---|
| Integrated Device Technology, Inc. ($IDTI) | 56.3% | 60.3% | 60.5% | 57.8% | 57.2% |
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 ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.6% | 11.3% | 9.2% | 10.7% | 9.8% |
|---|
| Integrated Device Technology, Inc. ($IDTI) | 15.8% | 23.8% | 24.4% | 21.3% | 22.1% |
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. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.7% | 4.7% | 4.4% |
|---|
| Integrated Device Technology, Inc. ($IDTI) | 3.6% | 3.1% | 2.3% | 3.7% | 5.4% |
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 ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.7% | 3.8% | 1.4% | 3.2% | 3.0% |
|---|
| Integrated Device Technology, Inc. ($IDTI) | 4.5% | 14.5% | 16.0% | 11.6% | 10.4% |
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. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (45 companies) | -0.5x | -0.2x | -0.0x | 0.4x | 0.3x |
|---|
| Integrated Device Technology, Inc. ($IDTI) | -1.2x | -0.9x | 0.4x | 0.5x | 1.9x |
