MACOM Technology Solutions Holdings, Inc. Net Debt / EBITDA surged on 91.3x from 7.2x to 98.6x in 2018 while EBITDA dropped on 92.1%
11/13/2018 • About MACOM Technology Solutions Holdings, Inc. (
$MTSI) • By InTwits
MACOM Technology Solutions Holdings, Inc. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 1.1% in FY2018, 11.0% in FY2017, 15.4% in FY2016, 15.4% in FY2015, 2.0% in FY2014
- MACOM Technology Solutions Holdings, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.8%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $53m in FY2018, $33m in FY2017, $31m in FY2016, $38m in FY2015, $17m in FY2014
- The company has unprofitable business model: ROIC is -7.4%
- It operates with high leverage: Net Debt/EBITDA is 98.6x while industry average is 2.0x
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 18.4%. Annual revenue decline showed slowdown in FY18Q4 - revenue decreased on 9.1%. During FY2014-FY2018 Revenue growth topped in FY2016 at 29.4% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.5 pp from 5.4% to 7.9% in 2018. During FY2014-FY2018 EBITDA Margin topped in FY2015 at 15.4% and was declining since that time.
Gross Margin decreased on 3.7 pp from 46.8% to 43.1% in FY2018. During the last 5 years Gross Margin topped in FY2016 at 51.7% and was declining since that time. SG&A as a % of Revenue increased slightly on 1.5 pp from 26.9% to 28.3% in FY2018. SG&A as a % of Revenue grew at 0.87 pp per annum in FY2014-FY2018.
Net Income margin showed almost no change in FY2018. During FY2014-FY2018 Net Income margin topped in FY2015 at 11.6% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 9.3%. MACOM Technology Solutions Holdings, Inc. showed almost no change in CAPEX/Revenue from FY2015 to FY2018. It's average CAPEX/Revenue for the last three years was 6.6%. MACOM Technology Solutions Holdings, Inc. has spent a lot to CAPEX (871% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-7.4%) and ROE (-19.4%). ROIC decreased on 6.1 pp from -1.3% to -7.4% in FY2018. ROE increased on 8.0 pp from -27.3% to -19.4% in FY2018. During FY2014-FY2018 ROIC topped in FY2016 at 1.6% and was declining since that time.
Leverage (Debt)
Debt level is 98.6x Net Debt / EBITDA and 114.1x Debt / EBITDA. Net Debt / EBITDA jumped on 91.3x from 7.2x to 98.6x in FY2018. Debt increased slightly on 1.2% while cash dropped on 27.2%. During FY2014-FY2018 Net Debt/EBITDA bottomed in FY2016 at 3.0x and was growing since that time.
MACOM Technology Solutions Holdings, Inc. has no short term refinancing risk: cash is higher than short term debt (1,287.8%).
Financial and operational results
FY ended 09/28/2018
MACOM Technology Solutions Holdings, Inc. ($MTSI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 339.2 | 420.6 | 544.3 | 698.8 | 570.4 | -18.4% |
| Gross Profit | 140.9 | 203.6 | 281.6 | 326.9 | 245.7 | -24.8% |
| SG&A | 82.6 | 110.0 | 145.4 | 187.9 | 161.7 | -14.0% |
| EBITDA | 6.8 | 64.8 | 83.8 | 76.9 | 6.1 | -92.1% |
| Net Income | -15.3 | 48.6 | 1.4 | -169.5 | -140.0 | |
Balance Sheet
|
|---|
| Cash | 173.9 | 122.3 | 333.0 | 130.1 | 94.7 | -27.2% |
| Short Term Debt | 3.5 | 4.1 | 7.2 | 7.7 | 7.4 | -4.5% |
| Long Term Debt | 343.2 | 335.1 | 576.3 | 678.7 | 687.4 | 1.3% |
Cash flow
|
|---|
| Capex | 17.0 | 38.3 | 31.3 | 32.8 | 53.0 | 61.7% |
Ratios
|
|---|
| Revenue growth | 5.0% | 24.0% | 29.4% | 28.4% | -18.4% | |
| EBITDA growth | -85.5% | 854.2% | 29.4% | -8.3% | -92.1% | |
|
|---|
| Gross Margin | 41.6% | 48.4% | 51.7% | 46.8% | 43.1% | -3.7% |
| EBITDA Margin | 2.0% | 15.4% | 15.4% | 11.0% | 1.1% | -9.9% |
| SG&A, % of revenue | 24.4% | 26.2% | 26.7% | 26.9% | 28.3% | 1.5% |
| Net Income Margin | -4.5% | 11.6% | 0.3% | -24.3% | -24.5% | -0.3% |
| CAPEX, % of revenue | 5.0% | 9.1% | 5.8% | 4.7% | 9.3% | 4.6% |
|
|---|
| ROIC | -6.8% | 1.6% | 1.6% | -1.3% | -7.4% | -6.1% |
| ROE | -6.6% | 14.9% | 0.3% | -27.3% | -19.4% | 8.0% |
| Net Debt/EBITDA | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x | 91.3x |
MACOM Technology Solutions Holdings, Inc. ($MTSI) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 131 | 150 | 138 | 151 | | -13.7% | -19.2% | -29.1% | -9.1% |
| EBITDA | 4 | 4 | -13 | 11 | | -86.6% | | -141.4% | -58.5% |
| Net Income | -23 | -15 | -85 | -16 | | | | | |
Balance Sheet
|
|---|
| Cash | 152 | 163 | 85 | 95 | | -57.0% | 44.5% | -49.1% | -27.2% |
| Short Term Debt | 8 | 8 | 7 | 7 | | 8.2% | 9.2% | -7.2% | -4.5% |
| Long Term Debt | 680 | 684 | 686 | 687 | | 15.8% | 16.6% | 1.2% | 1.3% |
Ratios
|
|---|
| Gross Margin | 46.6% | 43.6% | 34.9% | 46.9% | | -5.2% | 6.6% | -12.7% | -5.3% |
| EBITDA Margin | 3.0% | 2.8% | -9.7% | 7.6% | | -16.2% | 9.2% | -26.4% | -9.0% |
| Net Income Margin | -17.2% | -10.3% | -62.0% | -10.9% | | -16.6% | 59.6% | -47.7% | -4.5% |
Peers in Semiconductors
Below you can find MACOM Technology Solutions Holdings, Inc. benchmarking vs. other companies in Semiconductors 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 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 8.5% | 4.4% | 10.9% | 5.0% |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | | 24.0% | 29.4% | 28.4% | -18.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 46.4% | 47.0% | 47.2% | 49.1% | 51.0% |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 41.6% | 48.4% | 51.7% | 46.8% | 43.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.9% | 11.3% | 9.2% | 10.7% | 10.0% |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 2.0% | 15.4% | 15.4% | 11.0% | 1.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.6% | 4.7% | 4.4% |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 5.0% | 9.1% | 5.8% | 4.7% | 9.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.7% | 3.8% | 1.5% | 3.2% | 5.2% |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | -6.8% | 1.6% | 1.6% | -1.3% | -7.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| Himax Technologies, Inc. ($HIMX) | -0.6x | 1.1x | -0.6x | 0.4x | 3.3x |
| |
|---|
| Median (45 companies) | -0.6x | -0.3x | -0.0x | 0.4x | 0.3x |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
