Microwave Filter Co Inc revenue jumped on 10.0% and EBITDA Margin increased on 7.6 pp from -5.7% to 1.9%
12/07/2018 • About Microwave Filter Co Inc (
$MFCO) • By InTwits
Microwave Filter Co Inc reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 1.9% in FY2018, -5.7% in FY2017, 1.8% in FY2016, -2.5% in FY2015, 4.9% in FY2014
- Microwave Filter Co Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: $0m in FY2018, $0m in FY2017, $0m in FY2016, $0m in FY2015, $0m in FY2014
- The company has unprofitable business model: ROIC is -0.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Microwave Filter Co Inc's Revenue jumped on 10.0%. Revenue growth showed acceleration in FY18Q4 - it increased 39.6% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 42.7 pp from -126% to -83.8% in 2018.
Gross Margin increased on 6.5 pp from 33.2% to 39.7% in FY2018. During FY2014-FY2018 Gross Margin bottomed in FY2017 at 33.2%. SG&A as a % of Revenue decreased slightly on 1.6 pp from 41.6% to 39.9% in FY2018.
Net Income margin increased on 8.2 pp from -8.7% to -0.48% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.22% in FY2018. The company's CAPEX/Revenue decreased slightly on 1.8 pp from 2.0% in FY2015 to 0.22% in FY2018. For the last three years the average CAPEX/Revenue was 0.80%.
Return on investment
The company operates at negative ROIC (-0.5%) and ROE (-1.3%). ROIC surged on 14.5 pp from -15.0% to -0.52% in FY2018. ROE surged on 18.4 pp from -19.7% to -1.3% in FY2018.
Leverage (Debt)
Debt level is -6.2x Net Debt / EBITDA and 4.2x Debt / EBITDA. Debt dropped on 15.3% while cash increased slightly on 0.91%.
Microwave Filter Co Inc has no short term refinancing risk: cash is higher than short term debt (1,319.0%).
Financial and operational results
FY ended 09/30/2018
Microwave Filter Co Inc ($MFCO) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 3.627 | 3.541 | 3.545 | 3.037 | 3.342 | 10.0% |
| Gross Profit | 1.495 | 1.317 | 1.300 | 1.009 | 1.326 | 31.4% |
| SG&A | 1.114 | 1.166 | 0.969 | 1.262 | 1.334 | 5.7% |
| EBITDA | 0.178 | -0.089 | 0.066 | -0.172 | 0.065 | |
| Net Income | 0.039 | -0.203 | -0.033 | -0.264 | -0.016 | |
Balance Sheet
|
|---|
| Cash | 1.082 | 0.897 | 0.923 | 0.668 | 0.674 | 0.9% |
| Short Term Debt | 0.043 | 0.045 | 0.047 | 0.049 | 0.051 | 4.7% |
| Long Term Debt | 0.410 | 0.366 | 0.319 | 0.270 | 0.219 | -18.9% |
Cash flow
|
|---|
| Capex | 0.026 | 0.071 | 0.012 | 0.056 | 0.007 | -87.0% |
Ratios
|
|---|
| Revenue growth | 26.3% | -2.4% | 0.1% | -14.3% | 10.0% | |
| EBITDA growth | -142.0% | -150.3% | -173.3% | -361.8% | -137.8% | |
|
|---|
| Gross Margin | 41.2% | 37.2% | 36.7% | 33.2% | 39.7% | 6.5% |
| EBITDA Margin | 4.9% | -2.5% | 1.8% | -5.7% | 1.9% | 7.6% |
| SG&A, % of revenue | 30.7% | 32.9% | 27.3% | 41.6% | 39.9% | -1.6% |
| Net Income Margin | 1.1% | -5.7% | -0.9% | -8.7% | -0.5% | 8.2% |
| CAPEX, % of revenue | 0.7% | 2.0% | 0.3% | 1.9% | 0.2% | -1.6% |
|
|---|
| ROIC | 2.1% | -9.8% | -1.6% | -15.0% | -0.5% | 14.5% |
| ROE | 2.3% | -12.6% | -2.2% | -19.7% | -1.3% | 18.4% |
| Net Debt/EBITDA | -3.5x | | -8.5x | | -6.2x |
Microwave Filter Co Inc ($MFCO) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1 | 1 | 1 | 1 | | 1.0% | -11.0% | 14.2% | 39.6% |
| EBITDA | -0 | -0 | -0 | 0 | | | | | |
| Net Income | -0 | -0 | -0 | 0 | | | | | |
Balance Sheet
|
|---|
| Cash | 1 | 1 | 1 | 1 | | -29.8% | -34.8% | -19.4% | 0.9% |
| Short Term Debt | 0 | 0 | 0 | 0 | | 4.7% | 4.7% | 5.1% | 4.7% |
| Long Term Debt | 0 | 0 | 0 | 0 | | -16.1% | -16.9% | -17.9% | -18.9% |
Ratios
|
|---|
| Gross Margin | 36.6% | 35.6% | 40.8% | 44.1% | | 4.7% | 2.6% | 8.6% | 8.3% |
| EBITDA Margin | -2.6% | -7.3% | -0.0% | 13.6% | | 6.5% | -3.9% | 6.7% | 17.2% |
| Net Income Margin | -5.2% | -9.9% | -2.6% | 11.6% | | 6.8% | -3.8% | 7.5% | 18.5% |
Peers in Communications Equipment
Below we provide Microwave Filter Co Inc 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. ($NTIP) | | 34.6% | 292.9% | -74.7% | 34.4% |
| |
|---|
| Median (66 companies) | | 0.7% | 7.6% | 5.6% | 2.8% |
|---|
| Microwave Filter Co Inc ($MFCO) | | -2.4% | 0.1% | -14.3% | 10.0% |
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. ($NTCT) | 78.7% | 79.2% | 65.6% | 70.2% | 72.4% |
| |
|---|
| Median (67 companies) | 42.4% | 44.0% | 43.9% | 41.7% | 41.2% |
|---|
| Microwave Filter Co Inc ($MFCO) | 41.2% | 37.2% | 36.7% | 33.2% | 39.7% |
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. ($ITRN) | 32.4% | 30.5% | 29.9% | 29.9% | 30.4% |
| |
|---|
| Median (65 companies) | 5.6% | 6.1% | 5.9% | 6.5% | 5.4% |
|---|
| Microwave Filter Co Inc ($MFCO) | 4.9% | -2.5% | 1.8% | -5.7% | 1.9% |
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 ($FNSR) | 11.3% | 11.9% | 9.4% | 9.7% | 16.8% |
| |
|---|
| Median (65 companies) | 2.3% | 2.3% | 2.0% | 1.8% | 1.7% |
|---|
| Microwave Filter Co Inc ($MFCO) | 0.7% | 2.0% | 0.3% | 1.9% | 0.2% |
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. ($CASA) | | | 43.2% | 39.7% | 21.9% |
| |
|---|
| Median (70 companies) | 1.2% | 2.3% | 2.4% | 2.2% | 0.7% |
|---|
| Microwave Filter Co Inc ($MFCO) | 2.1% | -9.8% | -1.6% | -15.0% | -0.5% |
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 ($FNSR) | -0.3x | 0.2x | -0.5x | 1.6x | 3.8x |
| |
|---|
| Median (45 companies) | -0.7x | -0.7x | -0.8x | -0.7x | 0.2x |
|---|
| Microwave Filter Co Inc ($MFCO) | -3.5x | | -8.5x | | -6.2x |
