IEC Electronics Corp. Net Income surged on 12,752% and EBITDA Margin increased slightly on 0.53 pp from 3.8% to 4.3%
11/28/2018 • About IEC Electronics Corp. (
$IEC) • By InTwits
IEC Electronics Corp. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 4.3% in FY2018, 3.8% in FY2017, 7.4% in FY2016, 1.7% in FY2015, 3.4% in FY2014
- IEC Electronics Corp. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.1%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $1m in 2018, $1m in 2017, $1m in 2016, $1m in 2015, $1m in 2014
- The company has potentially unprofitable business model: ROIC is 6.4%
- It operates with high leverage: Net Debt/EBITDA is 4.9x while industry average is 3.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
IEC Electronics Corp.'s Revenue surged on 21.2%. Revenue growth showed acceleration in FY18Q4 - it increased 23.9% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.53 pp from 3.8% to 4.3% in FY2018.
Gross Margin showed almost no change in FY2018. SG&A as a % of Revenue decreased slightly on 0.79 pp from 10.6% to 9.8% in FY2018. During the last 5 years SG&A as a % of Revenue topped in FY2015 at 13.1% and was declining since that time.
Net Income margin increased on 8.8 pp from 0.084% to 8.9% in FY2018. Net Income margin followed a growing trend at 5.1 pp per annum in FY2014-FY2018.
Investments (CAPEX, working capital and M&A)
IEC Electronics Corp.'s CAPEX/Revenue was 3.4% in FY2018. IEC Electronics Corp.'s CAPEX/Revenue increased slightly on 1.2 pp from 2.2% in FY2015 to 3.4% in FY2018. It's average level of CAPEX/Revenue for the last three years was 3.2%. To secure its fast growth IEC Electronics Corp. invested a large share of EBITDA (77.6%) to CAPEX.
Return on investment
The company operates at good ROE (52.3%) while ROIC is low (6.4%). ROIC increased on 3.3 pp from 3.1% to 6.4% in FY2018. ROE jumped on 51.7 pp from 0.57% to 52.3% in FY2018.
Leverage (Debt)
Debt level is 4.9x Net Debt / EBITDA and 4.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 5.6x to 4.9x in FY2018. Debt surged on 20.4% while cash didn't change in FY2018.
IEC Electronics Corp. has short term refinancing risk: cash is only 0.0% of short term debt.
Valuation and dividends
IEC Electronics Corp.'s trades at EV/EBITDA 17.2x and P/E 6.0x.
Management team
Jeffrey T Schlarbaum "Jeff" is a IEC Electronics Corp.'s CEO. Jeffrey T Schlarbaum "Jeff" is a founder and has spent 4 years with the company. IEC Electronics Corp.'s CFO Thomas L Barbato has spent 0 years with the company.
Financial and operational results
FY ended 09/30/2018
IEC Electronics Corp. ($IEC) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 120.8 | 127.0 | 127.0 | 96.5 | 116.9 | 21.2% |
| Gross Profit | 13.7 | 16.3 | 20.3 | 11.3 | 14.2 | 25.8% |
| SG&A | 12.5 | 16.6 | 14.0 | 10.2 | 11.4 | 12.2% |
| EBITDA | 4.1 | 2.2 | 9.4 | 3.7 | 5.1 | 38.2% |
| Net Income | -15.1 | -10.2 | 4.8 | 0.1 | 10.4 | 12,751.9% |
Balance Sheet
|
|---|
| Cash | 2.0 | 0.4 | 0.8 | 0.0 | 0.0 | |
| Short Term Debt | 2.9 | 2.9 | 2.9 | 1.2 | 1.8 | 46.0% |
| Long Term Debt | 28.5 | 28.3 | 16.7 | 19.4 | 23.0 | 18.8% |
Cash flow
|
|---|
| Capex | 4.3 | 2.7 | 3.3 | 3.5 | 3.9 | 11.4% |
Ratios
|
|---|
| Revenue growth | -14.3% | 5.1% | 0.0% | -24.1% | 21.2% | |
| EBITDA growth | -41.0% | -46.9% | 327.6% | -61.0% | 38.2% | |
|
|---|
| Gross Margin | 11.3% | 12.8% | 16.0% | 11.7% | 12.1% | 0.4% |
| EBITDA Margin | 3.4% | 1.7% | 7.4% | 3.8% | 4.3% | 0.5% |
| SG&A, % of revenue | 10.4% | 13.1% | 11.1% | 10.6% | 9.8% | -0.8% |
| Net Income Margin | -12.5% | -8.0% | 3.8% | 0.1% | 8.9% | 8.8% |
| CAPEX, % of revenue | 3.5% | 2.2% | 2.6% | 3.7% | 3.4% | -0.3% |
|
|---|
| ROIC | 0.1% | -3.7% | 16.9% | 3.1% | 6.4% | 3.3% |
| ROE | -61.0% | -78.1% | 42.4% | 0.6% | 52.3% | 51.7% |
| Net Debt/EBITDA | 7.1x | 14.0x | 2.0x | 5.6x | 4.9x | -0.7x |
IEC Electronics Corp. ($IEC) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 21 | 32 | 30 | 34 | | 0.9% | 48.7% | 12.4% | 23.9% |
| EBITDA | -1 | 2 | 1 | 2 | | -3,938.9% | 766.4% | -37.9% | 38.9% |
| Net Income | -0 | 2 | 0 | 9 | | | | -74.7% | 1,108.1% |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 0 | 0 | | -100.0% | -100.0% | -100.0% | |
| Short Term Debt | 2 | 3 | 1 | 2 | | 17.0% | 53.0% | 23.1% | 46.0% |
| Long Term Debt | 19 | 23 | 25 | 23 | | 17.7% | 22.3% | 21.5% | 18.8% |
Ratios
|
|---|
| Gross Margin | 7.2% | 15.1% | 11.3% | 13.1% | | -1.4% | 4.4% | -2.7% | 0.6% |
| EBITDA Margin | -3.3% | 7.6% | 3.7% | 6.6% | | -3.4% | 6.3% | -3.0% | 0.7% |
| Net Income Margin | -2.3% | 5.0% | 0.7% | 26.7% | | 1.8% | 7.8% | -2.4% | 23.9% |
Peers in Electronic Manufacturing Servi
Below you can find IEC Electronics Corp. benchmarking vs. other companies in Electronic Manufacturing Servi 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 |
|---|
| RF Industries, Ltd. ($RFIL) | | 41.9% | -7.8% | -24.0% | 118.4% |
| Alpine 4 Technologies Ltd ($ALPP) | | | 35,893.8% | 5.8% | 71.5% |
| Kemet Corporation ($KEM) | | -1.3% | -10.7% | 3.1% | 58.4% |
| SMTC Corporation ($SMTX) | | -3.5% | -23.9% | -17.1% | 55.2% |
| Deswell Industries, Inc. ($DSWL) | | -7.0% | 17.1% | -0.1% | 36.3% |
| |
|---|
| Median (27 companies) | | 2.6% | 1.7% | 3.0% | 7.1% |
|---|
| IEC Electronics Corp. ($IEC) | | 5.1% | 0.0% | -24.1% | 21.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Neonode Inc. ($NEON) | 68.2% | 66.0% | 86.9% | 77.1% | 89.2% |
| Andrea Electronics Corp ($ANDR) | 83.8% | 99.1% | 88.5% | 96.2% | 70.4% |
| Data I/O Corporation ($DAIO) | 53.9% | 52.4% | 55.0% | 58.9% | 59.4% |
| IPG Photonics Corporation ($IPGP) | 54.1% | 54.6% | 54.9% | 56.6% | 54.8% |
| CTS Corporation ($CTS) | 32.2% | 33.2% | 35.4% | 33.2% | 35.1% |
| |
|---|
| Median (27 companies) | 14.7% | 19.4% | 22.2% | 15.8% | 15.2% |
|---|
| IEC Electronics Corp. ($IEC) | 11.3% | 12.8% | 16.0% | 11.7% | 12.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| IPG Photonics Corporation ($IPGP) | 41.5% | 42.4% | 41.8% | 44.7% | 40.9% |
| TE Connectivity Ltd. ($TEL) | 19.7% | 19.3% | 20.9% | 20.4% | 21.4% |
| CTS Corporation ($CTS) | 14.7% | 9.0% | 20.7% | 14.0% | 17.8% |
| Methode Electronics, Inc. ($MEI) | 12.6% | 15.4% | 16.5% | 16.5% | 16.1% |
| RF Industries, Ltd. ($RFIL) | 12.4% | 6.7% | -12.1% | 3.1% | 15.9% |
| |
|---|
| Median (27 companies) | 4.8% | 5.8% | 4.8% | 5.0% | 4.8% |
|---|
| IEC Electronics Corp. ($IEC) | 3.4% | 1.7% | 7.4% | 3.8% | 4.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Maxwell Technologies, Inc. ($MXWL) | 3.7% | 2.5% | 4.9% | 6.6% | 11.3% |
| IPG Photonics Corporation ($IPGP) | 11.5% | 7.8% | 12.6% | 9.0% | 11.0% |
| eMagin Corporation ($EMAN) | 5.8% | 4.7% | 6.7% | 6.2% | 8.8% |
| TE Connectivity Ltd. ($TEL) | 5.3% | 4.9% | 5.3% | 5.6% | 6.7% |
| CTS Corporation ($CTS) | 3.2% | 2.5% | 5.2% | 4.3% | 6.1% |
| |
|---|
| Median (27 companies) | 2.5% | 2.4% | 2.8% | 2.7% | 2.4% |
|---|
| IEC Electronics Corp. ($IEC) | 3.5% | 2.2% | 2.6% | 3.7% | 3.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| RF Industries, Ltd. ($RFIL) | 8.5% | 4.6% | -18.7% | 0.9% | 29.2% |
| IPG Photonics Corporation ($IPGP) | 27.0% | 27.8% | 25.1% | 29.9% | 22.9% |
| Methode Electronics, Inc. ($MEI) | 19.7% | 26.1% | 22.7% | 20.8% | 19.2% |
| TE Connectivity Ltd. ($TEL) | 17.3% | 15.1% | 15.9% | 16.2% | 18.4% |
| Kemet Corporation ($KEM) | -2.8% | 3.8% | 6.2% | 6.9% | 16.9% |
| |
|---|
| Median (29 companies) | 5.0% | 5.3% | 6.2% | 5.7% | 6.7% |
|---|
| IEC Electronics Corp. ($IEC) | 0.1% | -3.7% | 16.9% | 3.1% | 6.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpine 4 Technologies Ltd ($ALPP) | | | | 34.1x | 65.7x |
| SigmaTron International, Inc. ($SGMA) | 2.7x | 4.1x | 2.4x | 3.4x | 16.0x |
| SMTC Corporation ($SMTX) | 3.5x | 1.8x | 1.0x | | 11.3x |
| Key Tronic Corporation ($KTCC) | 0.2x | 3.4x | 2.6x | 2.5x | 3.9x |
| Nortech Systems Incorporated ($NSYS) | 3.8x | 8.2x | 4.6x | 10.9x | 3.8x |
| |
|---|
| Median (22 companies) | -0.5x | -0.9x | -0.0x | -0.1x | -0.2x |
|---|
| IEC Electronics Corp. ($IEC) | 7.1x | 14.0x | 2.0x | 5.6x | 4.9x |
