Know Labs Inc revenue dropped on 11.7% while EBITDA Margin surged on 15.5 pp from -64.9% to -49.4%
12/21/2018 • About Know Labs Inc (
$KNWN) • By InTwits
Know Labs Inc reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Know Labs Inc is a company in decline: FY2018 revenue growth was -11.7%, 5 years revenue CAGR was -12.9%
- The company operates at negative EBITDA Margin: -49.4%
- Know Labs Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 was 0.0% while average EBITDA Margin was -40.4% for the sames years
- Know Labs Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 11.7%. Revenue decline showed acceleration in FY18Q4 - it was 28.0% YoY. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 15.5 pp from -64.9% to -49.4% in FY2018. During the last 5 years EBITDA Margin bottomed in FY2017 at -64.9%.
Gross Margin showed almost no change in FY2018. Gross Margin grew at 0.84 pp per annum in FY2014-FY2018. SG&A as a % of Revenue decreased on 5.1 pp from 63.4% to 58.3% in FY2018. SG&A as a % of Revenue followed a growing trend at 5.3 pp per annum in the last 5 years.
Net Income margin increased on 4.3 pp from -80.0% to -75.7% in FY2018. Net Income margin followed a declining trend at -16.4 pp per annum in FY2014-FY2018.
Investments (CAPEX, working capital and M&A)
Know Labs Inc's CAPEX/Revenue was 2.3% in FY2018. The company showed CAPEX/Revenue growth of 2.3 pp from 0% in FY2015 to 2.3% in FY2018.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.8x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2018. Debt jumped on 38.3% while cash jumped on 806%.
Know Labs Inc has short term refinancing risk: cash is only 38.9% of short term debt.
Financial and operational results
FY ended 09/30/2018
Know Labs Inc ($KNWN) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 7.983 | 6.291 | 6.024 | 4.874 | 4.303 | -11.7% |
| Gross Profit | 1.289 | 1.016 | 0.988 | 0.908 | 0.822 | -9.5% |
| SG&A | 3.180 | 2.984 | 3.355 | 3.088 | 2.509 | -18.8% |
| EBITDA | -2.143 | -1.977 | -2.514 | -3.162 | -2.125 | |
| Net Income | -1.017 | -2.631 | -1.747 | -3.901 | -3.258 | |
Balance Sheet
|
|---|
| Cash | 0.070 | 0.082 | 0.188 | 0.103 | 0.934 | 805.6% |
| Short Term Debt | 1.457 | 1.274 | 2.080 | 1.736 | 2.400 | 38.3% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.000 | 0.000 | 0.023 | 0.000 | 0.097 | |
Ratios
|
|---|
| Revenue growth | -6.9% | -21.2% | -4.2% | -19.1% | -11.7% | |
| EBITDA growth | -38.7% | -7.8% | 27.2% | 25.8% | -32.8% | |
|
|---|
| Gross Margin | 16.1% | 16.2% | 16.4% | 18.6% | 19.1% | 0.5% |
| EBITDA Margin | -26.8% | -31.4% | -41.7% | -64.9% | -49.4% | 15.5% |
| SG&A, % of revenue | 39.8% | 47.4% | 55.7% | 63.4% | 58.3% | -5.1% |
| Net Income Margin | -12.7% | -41.8% | -29.0% | -80.0% | -75.7% | 4.3% |
| CAPEX, % of revenue | 0.0% | 0.0% | 0.4% | 0.0% | 2.3% | |
|
|---|
Know Labs Inc ($KNWN) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1 | 1 | 1 | 1 | | 7.3% | -27.0% | 8.6% | -28.0% |
| EBITDA | -0 | -0 | -1 | -1 | | | | | |
| Net Income | -1 | -1 | -1 | -1 | | | | -195.9% | |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 1 | 1 | | -49.0% | -100.0% | 5,607.5% | 805.6% |
| Short Term Debt | 2 | 3 | 3 | 2 | | 26.5% | 102.1% | 127.7% | 38.3% |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 20.1% | 20.8% | 17.8% | 17.2% | | 3.5% | 0.4% | 0.7% | -2.5% |
| EBITDA Margin | -19.5% | -44.7% | -64.9% | -77.8% | | 121.4% | -28.4% | -22.1% | -6.5% |
| Net Income Margin | -42.8% | -118.9% | -45.7% | -106.1% | | 140.6% | -49.1% | -97.5% | -0.5% |
Peers in Electronic Equipment & Instrum
Below we provide Know Labs Inc benchmarking against other companies in Electronic Equipment & Instrum 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 |
|---|
| 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. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (61 companies) | -78.5% | 4.5% | 1.2% | 4.6% | 10.4% |
|---|
| Know Labs Inc ($KNWN) | | -21.2% | -4.2% | -19.1% | -11.7% |
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 ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (60 companies) | 42.7% | 42.3% | 41.2% | 41.8% | 42.0% |
|---|
| Know Labs Inc ($KNWN) | 16.1% | 16.2% | 16.4% | 18.6% | 19.1% |
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. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (60 companies) | 5.5% | 5.2% | 3.4% | 5.1% | 4.2% |
|---|
| Know Labs Inc ($KNWN) | -26.8% | -31.4% | -41.7% | -64.9% | -49.4% |
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 ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| |
|---|
| Median (60 companies) | 1.9% | 2.0% | 2.1% | 1.7% | 2.2% |
|---|
| Know Labs Inc ($KNWN) | 0.0% | 0.0% | 0.4% | 0.0% | 2.3% |
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 ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (72 companies) | 3.3% | 2.2% | 2.1% | 2.6% | 1.1% |
|---|
| Know Labs Inc ($KNWN) | | | | | |
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 (36 companies) | -0.8x | -0.9x | -0.8x | -0.7x | -0.9x |
|---|
