Giga-tronics Inc reports 1,578% CAPEX growth in 2018 while 39.8% Revenue decline
06/13/2018 • About Giga-tronics Inc (
$GIGA) • By InTwits
Giga-tronics Inc reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Giga-tronics Inc is a company in decline: FY2018 revenue growth was -39.8%, 5 years revenue CAGR was -7.1%
- The company operates at negative EBITDA Margin: -20.6%
- Giga-tronics Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 was 0.0% while average EBITDA Margin was -14.5% for the sames years
- Giga-tronics Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: $1m in FY2018, $0m in FY2017, $0m in FY2016, $0m in FY2015, $0m in FY2014
- The company has unprofitable business model: ROIC is -131.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 39.8%. Revenue decline showed acceleration in FY18Q4 - it was 55.2% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 11.3 pp from -9.3% to -20.6% in FY2018.
Gross Margin showed almost no change in FY2018. During the last 5 years Gross Margin topped in FY2015 at 43.4% and was declining since that time. SG&A as a % of Revenue surged on 13.1 pp from 28.5% to 41.6% in FY2018.
Net Income margin dropped on 22.1 pp from -9.5% to -31.6% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 7.0% in FY2018. CAPEX/Revenue increased on 6.9 pp from 0.087% in FY2015 to 7.0% in FY2018. It's average CAPEX/Revenue for the last three years was 2.9%.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.1x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2018. Debt surged on 183% while cash increased on 4.5%.
Giga-tronics Inc has short term refinancing risk: cash is only 72.4% of short term debt.
Financial and operational results
FY ended 03/31/2018
Giga-tronics Inc ($GIGA) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 13.309 | 18.452 | 14.596 | 16.267 | 9.800 | -39.8% |
| Gross Profit | 4.498 | 8.007 | 4.621 | 4.551 | 2.736 | -39.9% |
| SG&A | 4.809 | 4.783 | 5.522 | 4.641 | 4.076 | -12.2% |
| EBITDA | -3.924 | 0.325 | -3.386 | -1.517 | -2.018 | |
| Net Income | -3.742 | -1.673 | -4.104 | -1.546 | -3.101 | |
Balance Sheet
|
|---|
| Cash | 1.059 | 1.170 | 1.331 | 1.421 | 1.485 | 4.5% |
| Short Term Debt | 1.512 | 0.880 | 1.223 | 0.632 | 2.051 | 224.5% |
| Long Term Debt | 0.077 | 0.450 | 0.165 | 0.114 | 0.062 | -45.6% |
Cash flow
|
|---|
| Capex | 0.228 | 0.016 | 0.192 | 0.041 | 0.688 | 1,578.0% |
Ratios
|
|---|
| Revenue growth | -6.2% | 38.6% | -20.9% | 11.4% | -39.8% | |
| EBITDA growth | 9.9% | -108.3% | -1,141.8% | -55.2% | 33.0% | |
|
|---|
| Gross Margin | 33.8% | 43.4% | 31.7% | 28.0% | 27.9% | -0.1% |
| EBITDA Margin | -29.5% | 1.8% | -23.2% | -9.3% | -20.6% | -11.3% |
| SG&A, % of revenue | 36.1% | 25.9% | 37.8% | 28.5% | 41.6% | 13.1% |
| Net Income Margin | -28.1% | -9.1% | -28.1% | -9.5% | -31.6% | -22.1% |
| CAPEX, % of revenue | 1.7% | 0.1% | 1.3% | 0.3% | 7.0% | 6.8% |
|
|---|
| ROIC | -122.6% | 0.4% | -84.8% | -67.7% | -131.6% | -63.9% |
| ROE | -179.1% | | | | | |
| Net Debt/EBITDA | | 0.5x | | | |
Giga-tronics Inc ($GIGA) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 2 | 2 | 3 | 2 | | -42.2% | -49.0% | 0.6% | -55.2% |
| Net Income | -1 | -1 | -0 | -0 | | | | | |
Balance Sheet
|
|---|
| Cash | 1 | 1 | 1 | 1 | | -36.7% | -76.7% | -53.7% | 4.5% |
| Short Term Debt | 2 | 2 | 2 | 2 | | 77.3% | 100.8% | 164.7% | 224.5% |
| Long Term Debt | 0 | 0 | 0 | 0 | | -34.6% | -39.0% | -42.2% | -45.6% |
Ratios
|
|---|
| Gross Margin | 23.4% | 21.7% | 25.0% | 41.7% | | -3.5% | -6.3% | -9.2% | 16.8% |
| Net Income Margin | -63.2% | -48.2% | -9.7% | -19.2% | | -60.2% | -39.2% | 8.2% | -10.1% |
Peers in Electronic Equipment & Instrum
Below we provide Giga-tronics Inc benchmarking against other companies in Electronic Equipment & Instrum 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 |
|---|
| 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. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (60 companies) | -37.7% | 3.5% | 1.2% | 3.6% | 11.0% |
|---|
| Giga-tronics Inc ($GIGA) | | 38.6% | -20.9% | 11.4% | -39.8% |
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 ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (59 companies) | 42.7% | 41.8% | 41.2% | 41.8% | 42.6% |
|---|
| Giga-tronics Inc ($GIGA) | 33.8% | 43.4% | 31.7% | 28.0% | 27.9% |
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. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (59 companies) | 5.5% | 5.2% | 3.4% | 5.1% | 3.5% |
|---|
| Giga-tronics Inc ($GIGA) | -29.5% | 1.8% | -23.2% | -9.3% | -20.6% |
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. ($LPTH) | 16.8% | 5.0% | 6.5% | 7.8% | 7.7% |
| Applied DNA Sciences Inc ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| Microvision, Inc. ($MVIS) | 5.9% | 12.4% | 6.1% | 32.2% | 6.3% |
| |
|---|
| Median (59 companies) | 1.9% | 2.0% | 2.1% | 1.7% | 2.2% |
|---|
| Giga-tronics Inc ($GIGA) | 1.7% | 0.1% | 1.3% | 0.3% | 7.0% |
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 ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (71 companies) | 3.3% | 2.3% | 2.2% | 3.3% | 1.2% |
|---|
| Giga-tronics Inc ($GIGA) | -122.6% | 0.4% | -84.8% | -67.7% | -131.6% |
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 (35 companies) | -0.8x | -0.9x | -0.8x | -0.7x | -0.8x |
|---|
