Daktronics, Inc. reports 11.0% EBITDA decline in 2018 and 0.84 pp EBITDA Margin decline from 5.8% to 5.0%
05/30/2018 • About Daktronics, Inc. (
$DAKT) • By InTwits
Daktronics, Inc. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 5.0% in FY2018, 5.8% in FY2017, 3.4% in FY2016, 7.5% in FY2015, 9.3% in FY2014
- Daktronics, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $1m in 2018, $2m in 2017, $1m in 2016, $3m in 2015, $2m in 2014
- The company has potentially unprofitable business model: ROIC is 6.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Daktronics, Inc.'s Revenue increased on 4.1%. Revenue growth showed slowdown in FY18Q4 - it was -3.8% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.84 pp from 5.8% to 5.0% in FY2018.
Gross Margin showed almost no change in FY2018. SG&A as a % of Revenue showed almost no change in FY2018.
Net Income margin decreased slightly on 0.85 pp from 1.8% to 0.91% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 3.0%. CAPEX/Revenue decreased slightly on 0.58 pp from 3.5% in FY2015 to 3.0% in FY2018. For the last three years the average CAPEX/Revenue was 2.5%. The company invested a large share of EBITDA (59.9%) to CAPEX.
Return on investment
The company operates at low ROIC (6.4%) and ROE (2.8%). ROIC decreased slightly on 1.4 pp from 7.8% to 6.4% in FY2018. ROE decreased on 2.4 pp from 5.2% to 2.8% in FY2018.
Leverage (Debt)
The company has no debt. Cash decreased on 8.9%.
Valuation and dividends
The company's trades at EV/EBITDA 11.0x and P/E 65.0x.
Management team
The company's CEO is Reece A Kurtenbach. Reece A Kurtenbach is a founder and has 5 years tenure with the company. The company's CFO Sheila Mae Anderson has spent 6 years with the company.
Financial and operational results
FY ended 04/28/2018
Daktronics, Inc. ($DAKT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 552.0 | 615.9 | 570.2 | 586.5 | 610.5 | 4.1% |
| Gross Profit | 141.7 | 144.6 | 121.0 | 140.4 | 145.7 | 3.7% |
| SG&A | 81.8 | 88.6 | 91.6 | 95.9 | 97.7 | 1.8% |
| EBITDA | 51.1 | 46.3 | 19.4 | 34.0 | 30.2 | -11.0% |
| Net Income | 22.2 | 20.9 | 2.1 | 10.3 | 5.6 | -46.2% |
Balance Sheet
|
|---|
| Cash | 45.1 | 57.3 | 28.3 | 32.6 | 29.7 | -8.9% |
| Short Term Debt | 0.8 | 0.6 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 12.8 | 14.6 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 13.5 | 21.8 | 17.1 | 8.5 | 18.1 | 113.2% |
Ratios
|
|---|
| Revenue growth | 6.5% | 11.6% | -7.4% | 2.9% | 4.1% | |
| EBITDA growth | 10.5% | -9.4% | -58.0% | 74.8% | -11.0% | |
|
|---|
| Gross Margin | 25.7% | 23.5% | 21.2% | 23.9% | 23.9% | -0.1% |
| EBITDA Margin | 9.3% | 7.5% | 3.4% | 5.8% | 5.0% | -0.8% |
| SG&A, % of revenue | 14.8% | 14.4% | 16.1% | 16.4% | 16.0% | -0.4% |
| Net Income Margin | 4.0% | 3.4% | 0.4% | 1.8% | 0.9% | -0.9% |
| CAPEX, % of revenue | 2.4% | 3.5% | 3.0% | 1.4% | 3.0% | 1.5% |
|
|---|
| ROIC | 16.3% | 13.7% | 1.1% | 7.8% | 6.4% | -1.4% |
| ROE | 11.3% | 10.1% | 1.0% | 5.2% | 2.8% | -2.4% |
| Net Debt/EBITDA | -0.6x | -0.9x | -1.5x | -1.0x | -1.0x | -0.0x |
Daktronics, Inc. ($DAKT) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 173 | 169 | 130 | 138 | | 9.9% | -0.4% | 12.6% | -3.8% |
| EBITDA | 16 | 14 | 1 | -1 | | 28.7% | -19.8% | | -114.5% |
| Net Income | 8 | 7 | -6 | -4 | | 52.2% | -20.9% | | -519.1% |
Balance Sheet
|
|---|
| Cash | 27 | 40 | 49 | 30 | | -9.8% | 16.6% | 1.4% | -8.9% |
| Short Term Debt | 0 | 0 | 1 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 16 | 0 | | | -100.0% | | |
Ratios
|
|---|
| Gross Margin | 25.8% | 25.2% | 21.9% | 21.6% | | 1.0% | -0.9% | 1.8% | -1.9% |
| EBITDA Margin | 9.4% | 8.2% | 0.8% | -0.7% | | 1.4% | -2.0% | 2.8% | -5.1% |
| Net Income Margin | 4.9% | 4.2% | -4.7% | -2.8% | | 1.4% | -1.1% | -0.3% | -3.4% |
Peers in Electronic Equipment & Instrum
Below you can find Daktronics, Inc. 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. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (60 companies) | -37.7% | 3.5% | 1.2% | 4.6% | 11.0% |
|---|
| Daktronics, Inc. ($DAKT) | | 11.6% | -7.4% | 2.9% | 4.1% |
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 ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (59 companies) | 42.7% | 42.3% | 41.2% | 41.8% | 42.6% |
|---|
| Daktronics, Inc. ($DAKT) | 25.7% | 23.5% | 21.2% | 23.9% | 23.9% |
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. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (59 companies) | 5.3% | 3.9% | 3.0% | 3.0% | 3.1% |
|---|
| Daktronics, Inc. ($DAKT) | 9.3% | 7.5% | 3.4% | 5.8% | 5.0% |
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 ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| |
|---|
| Median (59 companies) | 1.8% | 1.9% | 2.1% | 1.7% | 2.2% |
|---|
| Daktronics, Inc. ($DAKT) | 2.4% | 3.5% | 3.0% | 1.4% | 3.0% |
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 ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (71 companies) | 3.3% | 1.8% | 2.2% | 1.8% | 0.8% |
|---|
| Daktronics, Inc. ($DAKT) | 16.3% | 13.7% | 1.1% | 7.8% | 6.4% |
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 ($MTSC) | -0.0x | -0.4x | 5.8x | 3.9x | 3.2x |
| |
|---|
| Median (34 companies) | -0.8x | -0.7x | -0.8x | -0.6x | -0.8x |
|---|
| Daktronics, Inc. ($DAKT) | -0.6x | -0.9x | -1.5x | -1.0x | -1.0x |
