Black Box Corporation EBITDA dropped on 263% and Revenue decreased on 9.5%
07/16/2018 • About Black Box Corporation (
$BBOX) • By InTwits
Black Box Corporation reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Black Box Corporation is a company in decline: FY2018 revenue growth was -9.5%, 5 years revenue CAGR was -4.9%
- The company operates at negative EBITDA Margin: -3.7%
- Black Box Corporation motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 was 0.0% while average EBITDA Margin was -5.0% for the sames years
- Black Box Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has unprofitable business model: ROIC is -20.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Black Box Corporation's Revenue decreased on 9.5%. Annual revenue decline showed slowdown in FY18Q4 - revenue decreased on 6.8%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 5.7 pp from 2.0% to -3.7% in FY2018.
Gross Margin decreased slightly on 0.67 pp from 28.4% to 27.7% in FY2018. Gross Margin followed a declining trend at -0.91 pp per annum in FY2014-FY2018. SG&A as a % of Revenue increased on 3.8 pp from 27.4% to 31.2% in FY2018. SG&A as a % of Revenue followed a growing trend at 1.3 pp per annum in the last 5 years.
Net Income margin dropped on 12.1 pp from -0.82% to -12.9% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 0.57%. The company showed almost no change in CAPEX/Revenue from FY2015 to FY2018. Average CAPEX/Revenue for the last three years was 0.85%. During FY2014-FY2018 CAPEX as a % of Revenue topped in FY2016 at 1.1% and was declining since that time.
Return on investment
The company operates at negative ROIC (-20.3%) and ROE (-104.3%). ROIC dropped on 19.7 pp from -0.51% to -20.3% in FY2018. ROE dropped on 99.5 pp from -4.7% to -104% in FY2018.
Leverage (Debt)
Debt level is -0.4x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 4.3x from 4.3x to in FY2018. Debt surged on 76.4% while cash jumped on 135%.
Black Box Corporation has short term refinancing risk: cash is only 21.2% of short term debt.
Financial and operational results
FY ended 03/31/2018
Black Box Corporation ($BBOX) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 971.7 | 992.4 | 912.7 | 855.7 | 774.6 | -9.5% |
| Gross Profit | 303.6 | 302.3 | 270.3 | 243.0 | 214.8 | -11.6% |
| SG&A | 245.5 | 263.1 | 255.7 | 234.4 | 241.4 | 3.0% |
| EBITDA | -90.2 | 46.1 | -169.0 | 17.4 | -28.3 | -262.8% |
| Net Income | -115.9 | 15.3 | -171.1 | -7.1 | -100.1 | |
Balance Sheet
|
|---|
| Cash | 30.8 | 23.5 | 23.5 | 14.2 | 33.5 | 134.9% |
| Short Term Debt | 0.2 | 0.9 | 1.1 | 1.0 | 157.8 | 16,272.6% |
| Long Term Debt | 160.4 | 137.3 | 119.7 | 88.8 | 0.5 | -99.5% |
Cash flow
|
|---|
| Capex | 7.3 | 8.5 | 10.5 | 7.2 | 4.5 | -37.9% |
Ratios
|
|---|
| Revenue growth | -2.6% | 2.1% | -8.0% | -6.2% | -9.5% | |
| EBITDA growth | -219.6% | -151.1% | -466.5% | -110.3% | -262.8% | |
|
|---|
| Gross Margin | 31.2% | 30.5% | 29.6% | 28.4% | 27.7% | -0.7% |
| EBITDA Margin | -9.3% | 4.6% | -18.5% | 2.0% | -3.7% | -5.7% |
| SG&A, % of revenue | 25.3% | 26.5% | 28.0% | 27.4% | 31.2% | 3.8% |
| Net Income Margin | -11.9% | 1.5% | -18.7% | -0.8% | -12.9% | -12.1% |
| CAPEX, % of revenue | 0.8% | 0.9% | 1.1% | 0.8% | 0.6% | -0.3% |
|
|---|
| ROIC | -18.0% | 5.7% | -49.1% | -0.5% | -20.3% | -19.7% |
| ROE | -27.8% | 4.5% | -69.4% | -4.7% | -104.3% | -99.5% |
| Net Debt/EBITDA | | 2.5x | | 4.3x | |
Black Box Corporation ($BBOX) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 192 | 194 | 195 | 194 | | -12.3% | -11.2% | -7.4% | -6.8% |
| EBITDA | -8 | -3 | -4 | -13 | | -212.5% | | -150.3% | -414.8% |
| Net Income | -10 | -11 | -28 | -51 | | | | -2,216.5% | |
Balance Sheet
|
|---|
| Cash | 10 | 30 | 18 | 33 | | -51.0% | 88.9% | 33.1% | 134.9% |
| Short Term Debt | 0 | 6 | 7 | 158 | | | 341.7% | 387.7% | 16,272.6% |
| Long Term Debt | 99 | 123 | 136 | 0 | | -13.7% | 21.3% | 44.8% | -99.5% |
Ratios
|
|---|
| Gross Margin | 27.4% | 29.1% | 27.0% | 27.3% | | -3.5% | 4.2% | -2.6% | -0.7% |
| EBITDA Margin | -4.4% | -1.5% | -2.0% | -6.9% | | -7.7% | -0.6% | -5.5% | -8.9% |
| Net Income Margin | -5.1% | -5.9% | -14.3% | -26.3% | | -4.9% | -3.1% | -15.0% | -25.4% |
Peers in Communications Equipment
Below we provide Black Box Corporation benchmarking against other companies in Communications Equipment 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 |
|---|
| Ribbon Communications Inc. ($RBBN) | | | | 30.6% | 75.2% |
| Extreme Networks, Inc. ($EXTR) | | 6.4% | -4.4% | 13.2% | 64.4% |
| Optical Cable Corporation ($OCC) | | -11.3% | -12.2% | -0.8% | 37.0% |
| ParkerVision Inc ($PRKR) | | | 37,601.2% | -97.5% | 35.0% |
| Network-1 Technologies, Inc. ($NTIP) | | 34.6% | 292.9% | -74.7% | 34.4% |
| |
|---|
| Median (66 companies) | | -0.4% | 7.6% | 5.6% | 3.5% |
|---|
| Black Box Corporation ($BBOX) | | 2.1% | -8.0% | -6.2% | -9.5% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| F5 Networks, Inc. ($FFIV) | 82.1% | 82.7% | 83.1% | 83.1% | 83.3% |
| Radware Ltd. ($RDWR) | 82.1% | 82.4% | 81.8% | 81.3% | 82.2% |
| Radcom Ltd. ($RDCM) | 63.2% | 76.8% | 69.6% | 71.8% | 74.0% |
| Casa Systems, Inc. ($CASA) | | 70.8% | 69.1% | 73.4% | 73.4% |
| NetScout Systems, Inc. ($NTCT) | 78.7% | 79.2% | 65.6% | 70.2% | 72.4% |
| |
|---|
| Median (67 companies) | 42.4% | 44.0% | 43.9% | 41.7% | 41.2% |
|---|
| Black Box Corporation ($BBOX) | 31.2% | 30.5% | 29.6% | 28.4% | 27.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Network-1 Technologies, Inc. ($NTIP) | 35.5% | 33.7% | 50.6% | 37.8% | 42.8% |
| InterDigital, Inc. ($IDCC) | 50.8% | 58.1% | 73.6% | 67.3% | 41.9% |
| EchoStar Corporation ($SATS) | 25.7% | 39.7% | 40.3% | 38.1% | 37.4% |
| Ubiquiti Networks, Inc. ($UBNT) | 34.7% | 25.5% | 37.3% | 34.3% | 32.8% |
| Ituran Location and Control Ltd. ($ITRN) | 32.4% | 30.5% | 29.9% | 29.9% | 30.4% |
| |
|---|
| Median (65 companies) | 5.6% | 6.1% | 5.9% | 6.5% | 5.4% |
|---|
| Black Box Corporation ($BBOX) | -9.3% | 4.6% | -18.5% | 2.0% | -3.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Resonant Inc. ($RESN) | | | 132.5% | 124.8% | 245.2% |
| ViaSat, Inc. ($VSAT) | 22.8% | 26.5% | 26.7% | 33.0% | 32.1% |
| Applied Optoelectronics, Inc. ($AAOI) | 31.5% | 30.1% | 19.0% | 17.5% | 26.9% |
| EchoStar Corporation ($SATS) | 19.7% | 43.8% | 39.9% | 30.9% | 26.5% |
| Finisar Corporation ($FNSR) | 11.3% | 11.9% | 9.4% | 9.7% | 16.8% |
| |
|---|
| Median (65 companies) | 2.3% | 2.3% | 2.0% | 1.9% | 1.7% |
|---|
| Black Box Corporation ($BBOX) | 0.8% | 0.9% | 1.1% | 0.8% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| F5 Networks, Inc. ($FFIV) | 33.9% | 40.8% | 43.1% | 46.9% | 47.9% |
| Ubiquiti Networks, Inc. ($UBNT) | 61.4% | 31.5% | 41.5% | 38.5% | 39.1% |
| Motorola Solutions, Inc. ($MSI) | -16.1% | 18.9% | 26.4% | 39.5% | 35.3% |
| Ituran Location and Control Ltd. ($ITRN) | 50.9% | 46.8% | 50.1% | 48.5% | 35.1% |
| Casa Systems, Inc. ($CASA) | | | 43.2% | 39.7% | 21.9% |
| |
|---|
| Median (70 companies) | 2.1% | 2.0% | 2.4% | 2.2% | 0.7% |
|---|
| Black Box Corporation ($BBOX) | -18.0% | 5.7% | -49.1% | -0.5% | -20.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Extreme Networks, Inc. ($EXTR) | | | -2.2x | -1.5x | 7.1x |
| ViaSat, Inc. ($VSAT) | 3.4x | 2.5x | 3.2x | 2.5x | 5.8x |
| CommScope Holding Company, Inc. ($COMM) | 2.3x | 9.6x | 4.3x | 4.6x | 4.4x |
| Inseego Corp. ($INSG) | | | | | 3.9x |
| Finisar Corporation ($FNSR) | -0.3x | 0.2x | -0.5x | 1.6x | 3.8x |
| |
|---|
| Median (46 companies) | -0.7x | -0.8x | -0.9x | -0.8x | -0.1x |
|---|
