Sono-Tek Corp EBITDA jumped on 168% and EBITDA Margin increased on 4.1 pp from 3.0% to 7.1%
05/24/2018 • About Sono-Tek Corp (
$SOTK) • By InTwits
Sono-Tek Corp reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 7.1% in FY2018, 3.0% in FY2017, 10.3% in FY2016, 11.6% in FY2015, 10.3% in FY2014
- Sono-Tek Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $0m in FY2018, $0m in FY2017, $0m in FY2016, $0m in FY2015, $0m in FY2014
- The company has potentially unprofitable business model: ROIC is 4.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Sono-Tek Corp's Revenue jumped on 13.2%. Revenue growth showed slowdown in FY18Q4 - it was 10.3% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 11.3 pp from -10.2% to 1.1% in 2018.
Gross Margin increased slightly on 1.9 pp from 46.2% to 48.1% in FY2018. SG&A as a % of Revenue showed almost no change in FY2018. SG&A as a % of Revenue stuck to a growing trend at 1.2 pp per annum in the last 5 years.
Net Income margin increased on 2.4 pp from 0.98% to 3.3% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 Sono-Tek Corp had CAPEX/Revenue of 1.7%. The company showed small CAPEX/Revenue decline of 1.6 pp from 3.3% in FY2015 to 1.7% in FY2018. It's average level of CAPEX/Revenue for the last three years was 2.5%. During the last 5 years CAPEX as a % of Revenue topped in FY2016 at 3.9% and was declining since that time.
Return on investment
The company operates at low ROIC (4.1%) and ROE (4.5%). ROIC increased on 5.7 pp from -1.6% to 4.1% in FY2018. ROE increased on 3.3 pp from 1.2% to 4.5% in FY2018.
Leverage (Debt)
Debt level is -1.3x Net Debt / EBITDA and 1.3x Debt / EBITDA. Debt dropped on 12.7% while cash dropped on 21.1%.
Sono-Tek Corp has no short term refinancing risk: cash is higher than short term debt (1,291.6%).
Financial and operational results
FY ended 02/28/2018
Sono-Tek Corp ($SOTK) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 10.279 | 10.849 | 11.834 | 9.725 | 11.008 | 13.2% |
| Gross Profit | 4.733 | 5.215 | 5.638 | 4.494 | 5.296 | 17.9% |
| SG&A | 2.975 | 3.187 | 3.471 | 3.232 | 3.635 | 12.4% |
| EBITDA | 1.062 | 1.258 | 1.217 | 0.292 | 0.781 | 167.6% |
| Net Income | 0.484 | 0.606 | 0.548 | 0.096 | 0.368 | 284.7% |
Balance Sheet
|
|---|
| Cash | 3.232 | 2.563 | 2.388 | 2.557 | 2.016 | -21.1% |
| Short Term Debt | 0.191 | 0.158 | 0.143 | 0.150 | 0.156 | 4.3% |
| Long Term Debt | 1.479 | 1.320 | 1.176 | 1.027 | 0.871 | -15.2% |
Cash flow
|
|---|
| Capex | 0.224 | 0.357 | 0.465 | 0.183 | 0.189 | 3.5% |
Ratios
|
|---|
| Revenue growth | 7.7% | 5.6% | 9.1% | -17.8% | 13.2% | |
| EBITDA growth | 112.3% | 18.4% | -3.3% | -76.0% | 167.6% | |
|
|---|
| Gross Margin | 46.1% | 48.1% | 47.6% | 46.2% | 48.1% | 1.9% |
| EBITDA Margin | 10.3% | 11.6% | 10.3% | 3.0% | 7.1% | 4.1% |
| SG&A, % of revenue | 28.9% | 29.4% | 29.3% | 33.2% | 33.0% | -0.2% |
| Net Income Margin | 4.7% | 5.6% | 4.6% | 1.0% | 3.3% | 2.4% |
| CAPEX, % of revenue | 2.2% | 3.3% | 3.9% | 1.9% | 1.7% | -0.2% |
|
|---|
| ROIC | 8.7% | 9.9% | 8.2% | -1.6% | 4.1% | 5.7% |
| ROE | 7.8% | 8.9% | 7.4% | 1.2% | 4.5% | 3.3% |
| Net Debt/EBITDA | -1.5x | -0.9x | -0.9x | -4.7x | -1.3x | 3.5x |
Sono-Tek Corp ($SOTK) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 3 | 3 | 3 | 3 | | 11.6% | 14.9% | 14.7% | 10.3% |
| EBITDA | 0 | 0 | 0 | 0 | | | 449.8% | 53.8% | 80.9% |
| Net Income | 0 | 0 | 0 | 0 | | -71.6% | | 211.9% | 53.5% |
Balance Sheet
|
|---|
| Cash | 2 | 2 | 2 | 2 | | -12.7% | -11.8% | -38.6% | -21.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | | 0.0% | 11.0% | 12.2% | 4.3% |
| Long Term Debt | 1 | 1 | 1 | 1 | | -12.6% | -14.6% | -15.3% | -15.2% |
Ratios
|
|---|
| Gross Margin | 47.2% | 50.1% | 49.5% | 44.4% | | 1.5% | 5.7% | 1.8% | -2.4% |
| EBITDA Margin | 4.9% | 7.1% | 9.3% | 6.5% | | 6.0% | 5.6% | 2.4% | 2.5% |
| Net Income Margin | 0.6% | 2.1% | 6.5% | 3.6% | | -1.9% | 5.9% | 4.1% | 1.0% |
Peers in Electronic Equipment & Instrum
Below you can find Sono-Tek Corp benchmarking vs. other companies in Electronic Equipment & Instrum 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 |
|---|
| Hickok Inc ($HICKA) | | -7.2% | 13.5% | 258.4% | 178.7% |
| Electro Scientific Industries, Inc. ($ESIO) | | -12.2% | 15.9% | -12.7% | 128.5% |
| Microvision, Inc. ($MVIS) | | 163.6% | 60.7% | -34.7% | 82.8% |
| Ipsidy Inc ($IDTY) | | | | | 66.2% |
| Magal Security Systems Ltd. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (60 companies) | -37.7% | 3.5% | 0.3% | 4.6% | 9.8% |
|---|
| Sono-Tek Corp ($SOTK) | | 5.6% | 9.1% | -17.8% | 13.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Intellicheck, Inc. ($IDN) | 58.2% | 57.1% | 80.0% | 85.5% | 91.3% |
| Image Sensing Systems, Inc. ($ISNS) | 74.7% | 77.1% | 71.0% | 79.9% | 80.9% |
| National Instruments Corporation ($NATI) | 74.4% | 74.1% | 74.5% | 74.5% | 75.4% |
| Cognex Corporation ($CGNX) | 77.9% | 77.2% | 75.2% | 75.6% | 74.4% |
| Applied DNA Sciences Inc ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (59 companies) | 41.7% | 41.8% | 40.1% | 41.5% | 41.4% |
|---|
| Sono-Tek Corp ($SOTK) | 46.1% | 48.1% | 47.6% | 46.2% | 48.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cognex Corporation ($CGNX) | 32.9% | 30.1% | 31.9% | 36.0% | 30.1% |
| Coherent, Inc. ($COHR) | 14.2% | 16.7% | 18.9% | 24.9% | 26.6% |
| Hollysys Automation Technologies, Ltd. ($HOLI) | 21.3% | 26.9% | 23.5% | 16.1% | 23.9% |
| Electro Scientific Industries, Inc. ($ESIO) | -10.1% | -19.1% | -2.0% | -17.8% | 23.1% |
| FLIR Systems, Inc. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (59 companies) | 5.3% | 3.9% | 3.0% | 5.1% | 3.1% |
|---|
| Sono-Tek Corp ($SOTK) | 10.3% | 11.6% | 10.3% | 3.0% | 7.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Wrap Technologies Inc ($WRTC) | | | | | 61.4% |
| ClearSign Combustion Corporation ($CLIR) | | 80.3% | 22.1% | 17.4% | 17.7% |
| LightPath Technologies, Inc. ($LPTH) | 16.8% | 5.0% | 6.5% | 7.8% | 7.7% |
| Giga-tronics Inc ($GIGA) | 1.7% | 0.1% | 1.3% | 0.3% | 7.0% |
| Applied DNA Sciences Inc ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| |
|---|
| Median (59 companies) | 1.8% | 1.9% | 2.1% | 1.6% | 2.3% |
|---|
| Sono-Tek Corp ($SOTK) | 2.2% | 3.3% | 3.9% | 1.9% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Evans & Sutherland Computer Corp ($ESCC) | | | 83.3% | 39.6% | 55.3% |
| Electro Scientific Industries, Inc. ($ESIO) | -11.7% | -19.7% | -7.1% | -22.9% | 31.5% |
| Coherent, Inc. ($COHR) | 9.9% | 13.1% | 15.6% | 24.0% | 21.5% |
| Zebra Technologies Corporation ($ZBRA) | 3.3% | 0.9% | 2.2% | 10.2% | 20.8% |
| Cognex Corporation ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (71 companies) | 3.3% | 1.8% | 1.8% | 3.3% | 0.8% |
|---|
| Sono-Tek Corp ($SOTK) | 8.7% | 9.9% | 8.2% | -1.6% | 4.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Itron, Inc. ($ITRI) | 2.1x | 1.9x | 1.0x | 2.0x | 12.3x |
| Track Group Inc ($TRCK) | | | | | 12.2x |
| Mesa Laboratories, Inc. ($MLAB) | 0.7x | 1.1x | 1.7x | 2.0x | 3.5x |
| Trimble Inc. ($TRMB) | 1.3x | 1.7x | 1.1x | 1.3x | 3.4x |
| MTS Systems Corporation ($MTSC) | -0.0x | -0.4x | 5.8x | 3.9x | 3.2x |
| |
|---|
| Median (34 companies) | -0.7x | -0.7x | -0.8x | -0.6x | -0.8x |
|---|
| Sono-Tek Corp ($SOTK) | -1.5x | -0.9x | -0.9x | -4.7x | -1.3x |
