Schmitt Industries, Inc. revenue jumped on 12.0% and EBITDA Margin increased on 8.8 pp from -6.2% to 2.6%
07/18/2018 • About Schmitt Industries, Inc. (
$SMIT) • By InTwits
Schmitt Industries, Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Schmitt Industries, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 0.0%. Average EBITDA Margin for the same period was -2.5%
- Schmitt Industries, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
- The company has potentially unprofitable business model: ROIC is 1.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Schmitt Industries, Inc.'s Revenue jumped on 12.0%. Revenue growth showed slowdown in FY18Q4 - it was 4.0% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.0 pp from -35.1% to -31.0% in 2018.
Gross Margin increased on 4.3 pp from 39.4% to 43.7% in FY2018. SG&A as a % of Revenue decreased on 5.1 pp from 45.3% to 40.2% in FY2018.
Net Income margin surged on 10.2 pp from -8.7% to 1.5% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 Schmitt Industries, Inc. had CAPEX/Revenue of 0.061%. The company showed almost no change in CAPEX/Revenue from FY2015 to FY2018. It's average CAPEX/Revenue for the last three years was 0.17%.
Return on investment
The company operates at low ROIC (1.9%) and ROE (2.6%). ROIC surged on 15.0 pp from -13.1% to 1.9% in FY2018. ROE surged on 16.9 pp from -14.3% to 2.6% in FY2018.
Leverage (Debt)
The company has no debt. Cash surged on 137%.
Valuation and dividends
The company's trades at EV/EBITDA 16.0x and P/E 37.2x.
Financial and operational results
FY ended 05/31/2018
Schmitt Industries, Inc. ($SMIT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 12.135 | 13.069 | 11.685 | 12.398 | 13.888 | 12.0% |
| Gross Profit | 5.626 | 6.141 | 4.867 | 4.886 | 6.065 | 24.1% |
| SG&A | 5.663 | 5.827 | 6.016 | 5.618 | 5.583 | -0.6% |
| EBITDA | -0.184 | 0.202 | -1.191 | -0.770 | 0.361 | |
| Net Income | -0.540 | -0.094 | -1.515 | -1.073 | 0.211 | |
Balance Sheet
|
|---|
| Cash | 1.511 | 1.796 | 0.989 | 0.868 | 2.053 | 136.6% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.056 | 0.067 | 0.004 | 0.053 | 0.008 | -83.9% |
Ratios
|
|---|
| Revenue growth | -2.6% | 7.7% | -10.6% | 6.1% | 12.0% | |
| EBITDA growth | -14.2% | -209.8% | -689.1% | -35.4% | -146.9% | |
|
|---|
| Gross Margin | 46.4% | 47.0% | 41.7% | 39.4% | 43.7% | 4.3% |
| EBITDA Margin | -1.5% | 1.5% | -10.2% | -6.2% | 2.6% | 8.8% |
| SG&A, % of revenue | 46.7% | 44.6% | 51.5% | 45.3% | 40.2% | -5.1% |
| Net Income Margin | -4.4% | -0.7% | -13.0% | -8.7% | 1.5% | 10.2% |
| CAPEX, % of revenue | 0.5% | 0.5% | 0.0% | 0.4% | 0.1% | -0.4% |
|
|---|
| ROIC | -5.2% | -0.7% | -16.3% | -13.1% | 1.9% | 15.0% |
| ROE | -5.5% | -1.0% | -17.3% | -14.3% | 2.6% | 16.9% |
| Net Debt/EBITDA | | -8.9x | | | -5.7x |
Schmitt Industries, Inc. ($SMIT) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 3 | 4 | 3 | 4 | | 6.6% | 42.0% | 1.2% | 4.0% |
| EBITDA | -0 | 0 | 0 | 0 | | | | | |
| Net Income | -0 | 0 | 0 | 0 | | | | | |
Balance Sheet
|
|---|
| Cash | 1 | 1 | 2 | 2 | | -47.2% | 8.1% | 312.2% | 136.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 45.4% | 45.8% | 40.8% | 42.6% | | -2.2% | 6.9% | 2.9% | 8.0% |
| EBITDA Margin | -3.0% | 4.0% | 0.4% | 7.6% | | -0.9% | 15.2% | 1.7% | 17.7% |
| Net Income Margin | -4.3% | 2.7% | 0.5% | 6.0% | | -0.0% | 17.1% | 4.6% | 17.8% |
Peers in Electronic Equipment & Instrum
Below you can find Schmitt Industries, 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. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (60 companies) | -37.7% | 3.5% | 1.2% | 3.6% | 9.8% |
|---|
| Schmitt Industries, Inc. ($SMIT) | | 7.7% | -10.6% | 6.1% | 12.0% |
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 ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (59 companies) | 41.7% | 41.8% | 40.1% | 41.8% | 41.4% |
|---|
| Schmitt Industries, Inc. ($SMIT) | 46.4% | 47.0% | 41.7% | 39.4% | 43.7% |
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. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (59 companies) | 5.5% | 5.2% | 3.4% | 5.1% | 3.5% |
|---|
| Schmitt Industries, Inc. ($SMIT) | -1.5% | 1.5% | -10.2% | -6.2% | 2.6% |
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. ($LPTH) | 16.8% | 5.0% | 6.5% | 7.8% | 7.7% |
| Giga-tronics Inc ($GIGA) | 1.7% | 0.1% | 1.3% | 0.3% | 7.0% |
| Applied DNA Sciences Inc ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| |
|---|
| Median (59 companies) | 1.9% | 2.0% | 2.1% | 1.7% | 2.3% |
|---|
| Schmitt Industries, Inc. ($SMIT) | 0.5% | 0.5% | 0.0% | 0.4% | 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 ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (71 companies) | 3.3% | 2.3% | 2.2% | 3.3% | 0.8% |
|---|
| Schmitt Industries, Inc. ($SMIT) | -5.2% | -0.7% | -16.3% | -13.1% | 1.9% |
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 ($MTSC) | -0.0x | -0.4x | 5.8x | 3.9x | 3.2x |
| |
|---|
| Median (34 companies) | -0.8x | -0.7x | -0.8x | -0.7x | -0.8x |
|---|
| Schmitt Industries, Inc. ($SMIT) | | -8.9x | | | -5.7x |
