Universal Security Instruments, Inc. revenue increased on 5.6% and EBITDA Margin increased on 2.1 pp from -6.7% to -4.7%
07/16/2018 • About Universal Security Instruments, Inc. (
$UUU) • By InTwits
Universal Security Instruments, Inc. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -4.7%
- Universal Security Instruments, Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 was 0.0% while average EBITDA Margin was -11.5% for the sames years
- Universal Security Instruments, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.1%.
- The company has unprofitable business model: ROIC is -4.7%
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 increased on 5.6%. Revenue growth showed acceleration in FY18Q4 - it increased 25.7% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.5 pp from 9.9% to 13.4% in 2018. During the last 5 years EBITDA Margin bottomed in FY2015 at -26.1% and was growing since that time.
Gross Margin increased slightly on 1.1 pp from 29.5% to 30.6% in FY2018. Gross Margin grew at 2.2 pp per annum in FY2014-FY2018. SG&A as a % of Revenue decreased slightly on 0.52 pp from 31.6% to 31.0% in FY2018. During the last 5 years SG&A as a % of Revenue topped in FY2015 at 42.2% and was declining since that time.
Net Income margin decreased slightly on 0.59 pp from -14.6% to -15.2% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 0.11%. CAPEX/Revenue showed almost no change from FY2015 to FY2018.
Return on investment
The company operates at negative ROIC (-4.7%) and ROE (-16.8%). ROIC increased slightly on 1.2 pp from -5.9% to -4.7% in FY2018. ROE decreased on 3.3 pp from -13.4% to -16.8% in FY2018. During FY2014-FY2018 ROIC bottomed in FY2015 at -12.7% and was growing since that time. During FY2014-FY2018 ROE topped in FY2016 at -12.2% and was declining since that time.
Leverage (Debt)
Debt level is -1.7x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2018. Debt dropped on 28.8% while cash dropped on 51.1%.
Universal Security Instruments, Inc. has short term refinancing risk: cash is only 8.0% of short term debt.
Financial and operational results
FY ended 03/31/2018
Universal Security Instruments, Inc. ($UUU) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 12.577 | 9.892 | 13.741 | 14.083 | 14.873 | 5.6% |
| Gross Profit | 2.841 | 2.328 | 3.779 | 4.149 | 4.544 | 9.5% |
| SG&A | 4.251 | 4.176 | 4.480 | 4.444 | 4.616 | 3.9% |
| EBITDA | -1.959 | -2.578 | -1.329 | -0.948 | -0.695 | |
| Net Income | -4.450 | -3.705 | -2.138 | -2.059 | -2.262 | |
Balance Sheet
|
|---|
| Cash | 2.051 | 0.049 | 0.363 | 0.262 | 0.128 | -51.1% |
| Short Term Debt | 0.000 | 0.000 | 0.314 | 2.264 | 1.611 | -28.8% |
| Long Term Debt | 0.025 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.033 | 0.000 | 0.000 | 0.000 | 0.016 | |
Ratios
|
|---|
| Revenue growth | -18.2% | -21.4% | 38.9% | 2.5% | 5.6% | |
| EBITDA growth | 67.2% | 31.6% | -48.5% | -28.6% | -26.7% | |
|
|---|
| Gross Margin | 22.6% | 23.5% | 27.5% | 29.5% | 30.6% | 1.1% |
| EBITDA Margin | -15.6% | -26.1% | -9.7% | -6.7% | -4.7% | 2.1% |
| SG&A, % of revenue | 33.8% | 42.2% | 32.6% | 31.6% | 31.0% | -0.5% |
| Net Income Margin | -35.4% | -37.5% | -15.6% | -14.6% | -15.2% | -0.6% |
| CAPEX, % of revenue | 0.3% | 0.0% | 0.0% | 0.0% | 0.1% | |
|
|---|
| ROIC | -8.7% | -12.7% | -7.7% | -5.9% | -4.7% | 1.2% |
| ROE | -18.5% | -18.0% | -12.2% | -13.4% | -16.8% | -3.3% |
Universal Security Instruments, Inc. ($UUU) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 3 | 4 | 4 | 4 | | 4.4% | -15.0% | 11.9% | 25.7% |
| EBITDA | -0 | -0 | -0 | 0 | | | | | |
| Net Income | -1 | -0 | -1 | -1 | | | | | |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 0 | 0 | | 40.3% | 81.7% | -66.3% | -51.1% |
| Short Term Debt | 2 | 1 | 1 | 2 | | | 57.9% | 99.1% | -28.8% |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 29.6% | 32.3% | 30.0% | 30.3% | | -3.9% | 2.8% | -3.0% | 7.8% |
| EBITDA Margin | -9.9% | -4.2% | -6.5% | 0.3% | | -4.2% | -2.2% | -1.6% | 15.4% |
| Net Income Margin | -16.4% | -4.7% | -28.5% | -12.1% | | -4.1% | -3.2% | -11.2% | 17.9% |
Peers in Electronic Equipment & Instrum
Below you can find Universal Security Instruments, 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. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (60 companies) | -37.7% | 4.5% | 0.3% | 4.6% | 11.0% |
|---|
| Universal Security Instruments, Inc. ($UUU) | | -21.4% | 38.9% | 2.5% | 5.6% |
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 ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (59 companies) | 42.7% | 42.3% | 41.2% | 41.8% | 42.6% |
|---|
| Universal Security Instruments, Inc. ($UUU) | 22.6% | 23.5% | 27.5% | 29.5% | 30.6% |
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. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (59 companies) | 5.5% | 5.2% | 3.4% | 5.1% | 3.5% |
|---|
| Universal Security Instruments, Inc. ($UUU) | -15.6% | -26.1% | -9.7% | -6.7% | -4.7% |
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 ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| |
|---|
| Median (59 companies) | 1.9% | 2.0% | 2.1% | 1.7% | 2.3% |
|---|
| Universal Security Instruments, Inc. ($UUU) | 0.3% | 0.0% | 0.0% | 0.0% | 0.1% |
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 ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (71 companies) | 3.3% | 2.3% | 2.2% | 3.3% | 1.2% |
|---|
| Universal Security Instruments, Inc. ($UUU) | -8.7% | -12.7% | -7.7% | -5.9% | -4.7% |
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 |
|---|
